Why can the market capitalization of altcoin fall deeper in October

The cryptocurrency market has experienced significant fluctuations in October, with the market capitalization of altcoin falling an additional 15%, while this month is not yet over. Could this trend become more serious before October closes?

Recent data and analysis have pointed to clues that investors can leverage to assess risks as well as opportunities in this sensitive phase.

Over 70,000 altcoin withdrawal transactions could deepen the fall.

The current decline is not only the result of short-term volatility but also reflects increased selling pressure and weak demand from investors. One of the clearest signals is the spike in the number of altcoins sent to exchanges, reaching the highest level this year.

According to data from CryptoQuant, on average over the past 7 days, the number of altcoin withdrawal transactions has exceeded 70,000. At the beginning of 2025, similar spikes coincided with major price falls of Bitcoin and altcoins.

Altcoin capital flow into exchanges | Source: CryptoQuant. “The trading of sending altcoins to exchanges has just reached its highest level of the year, indicating that selling pressure is increasing — or traders are preparing for the next big rotation,” Coin Bureau commented.

The volume of altcoins transferred to exchanges increasing may indicate a redistribution rather than an immediate fall. However, data on stablecoins will help refine the picture of market sentiment.

Weak stablecoin inflows indicate a fall in purchasing power

The stablecoin CEX cash flow data from CryptoQuant shows that, although net cash flow remains positive, it has significantly decreased since mid-September and is now approaching zero in October. The decline in the amount of stablecoins transferred to exchanges indicates that potential buying power is decreasing. Combined with the increase in altcoin supply on exchanges, this imbalance could increase downward pressure.

CEX flow of Stablecoins | Source: CryptoQuant. By the end of 2024, a similar decline in net stablecoin flows led to a major market correction. The USDT.D index, which tracks Tether's dominance in total market capitalization, also supports this argument. The index has risen above 5%, indicating that stablecoins are not being used to drive altcoin prices.

According to Altcoin Vector, recent liquidation events have increased the dominance of USDT — a pattern that history shows often coincides with a sharp fall in altcoin prices.

The dominance of USDT over Altcoin/Other coins | Source: Altcoin Vector"The tug-of-war between altcoin and liquidity has hit a snag. The recent deleveraging event has pushed USDT's dominance higher, and history shows that every such move coincides with a sharp decline in altcoin," Altcoin Vector commented.

Signs of a potential bottom in the context of broader weakness

These indicators suggest that altcoin may struggle to recover quickly from the major liquidation event that has recently shaken the market. However, technical analyst Merlijn believes that altcoin may be approaching a cycle bottom. His view is based on the MACD crossover signal, which has appeared only three times in the past eight years — each time marking the beginning of a super altcoin cycle. History shows that such moments often lead to strong price increases.

Nevertheless, optimism needs to be balanced with caution. Positive technical signals may emerge during the most challenging phases of the market, but the current bearish indicators cannot be overlooked. Investors need to carefully consider both aspects as October unfolds — a month often remembered for its volatility and significant turning points.

Mr. Teacher