Altcoin bulls retreat as risk-off trade sends capital back to BTC, ETH

Altcoins face 55% futures OI drop, shrinking rally windows and stagnant liquidity as Wintermute and Pantera say risk capital is rotating back to Bitcoin and Ethereum majors.
Summary

• Wintermute reports low-cap altcoins now only trend up for ~20 days on average in 2025, versus 40–60 days in prior cycles, as speculative flows thin out.
• Open interest in altcoin futures has fallen 55% since October, erasing over $40 billion and leaving investors to rotate into Bitcoin and Ethereum while watching macro data.
• Pantera’s Cosmo Jiang and Wintermute strategists describe a volatile, bearish market where BTC must lead any recovery and retail speculation shifts toward AI and tech stocks

Altcoins in the cryptocurrency market are experiencing significant capital outflows amid increased risk aversion, according to a recent report from market maker Wintermute.

Wintermute says low-cap cons are down on average

Low market capitalization tokens, previously attractive for their high-yield potential, now maintain investor interest for limited periods, the report stated. The average upward trend in altcoins in 2025 lasted just 20 days, compared to 40 to 60 days in previous years, according to the over-the-counter crypto trading report.

Open positions in altcoin futures have declined 55 percent since October, resulting in the closure of more than $40 billion in positions, the report found.

Jake Ostrovskis, Head of OTC Trading at Wintermute, attributed the trend to declining market enthusiasm and individual investors redirecting speculative capital to other sectors. Investors are now favoring larger, more established crypto assets, particularly Bitcoin and Ethereum, while positioning for macroeconomic developments, Ostrovskis stated.

Macroeconomic factors have emerged as primary drivers of cryptocurrency price movements in recent months. Statements by U.S. President Donald Trump regarding tariffs and expectations of interest rate cuts triggered sharp fluctuations in Bitcoin prices, according to market data.

The market experienced substantial sell-offs following tariff announcements in April and October of last year, while currency depreciation contributed to Bitcoin reaching an all-time high in October, market observers noted.

Cosmo Jiang, a general partner at Pantera Capital Management, described the overall market outlook as weak. “By most indicators, the market is still volatile and bearish. Bitcoin needs to lead the way for a healthy recovery,” Jiang stated.

The CoinMarketCap Altcoin Season Index shows that crypto assets outside the top 10 by market capitalization have underperformed major tokens significantly over the last 90 days.

Altcoin investors faced substantial losses during the sharp sell-off in October, when $19 billion was erased from digital assets in a single day, with no strong recovery observed since, according to market data.

Jasper De Maere, a strategist at Wintermute, reported that altcoin liquidity has remained stagnant as capital seeks new speculative opportunities. De Maere noted that while cryptocurrency served as the primary speculation area in 2021, individual investor interest has shifted toward stock market themes including space, quantum physics, robotics, and artificial intelligence.