Why Altcoins Drag Their Feet Like Bitcoin, Ethereum Soar

Bitcoin and Ethereum continue to capture investor interest, while the broader Altcoin market struggles to keep pace, creating a divergence that experts say is a result of the maturing of the markets.

While major assets like Ethereum, XRP, and Solana have posted double-digit year-to-date gains, performance in the rest of the top 10 cryptocurrencies by market cap has been lackluster.

With the exception of BNB, which has hit multiple all-time highs this year, other tokens such as Chainlink, Cardano, SUI and Dogecoin have seen performance ranging from single-digit gains to double-digits for the year, according to Coetecko data.

The percentage of coins trading above their 200-day moving average, often a barometer of an asset’s bullish or bearish slant, has fallen to around 55%, a notable decline from the peak of 78% on September 13, according to data from Macromicro.

“Capital naturally prefers assets with high liquidity, clear narratives and strong security,” Jeffrey Ding, principal analyst at Hashkey Group, told Declutter.

He explained that a structurally divided market is inevitable under current macroeconomic conditions, with capital favoring top assets such as Bitcoin and Ethereum, driven mainly by institutional flows through ETFs and corporate treasuries.

Ding explained that many altcoins are being left behind because they have not connected with new market narratives, citing examples of AI, RWA and decentralized exchange narratives that have not.

“The market is losing patience with high-valuation, low-circulation supply tokens without clear use cases,” he added.

“It’s a sign that the industry is maturing,” Peter Chung, head of research at Presto Research, said Declutter. “Market participants have learned over the years how to evaluate projects based on their merits and differentiate winners from losers.”

He attributes this shift to the changing composition of market participants.

“With increasing institutional participation, the days of retail investing in and out of certain sectors just based on ‘vibes’ are mostly behind us,” Chung explained.

“The retail investors still do their stuff there, of course, but their overall impact on the market is much less and is overwhelmed by the institutional flow, which is much larger and disciplined.”

Chung noted that while retail-driven rallies still occur in specific niches—citing Zcash as a recent example—these are now “power pockets” rather than market-wide trends.

Zcash, a privacy coin, has risen 140% to $134 in the past two weeks, per Coingecko data, yet it remains 95.9% below its all-time high of $3,191. The token’s rise comes after it received endorsements from multiple prominent investors in both crypto and traditional finance, Declutter earlier reported.

Looking ahead, Ding expects a change, but not a return to a broad Altcoin boom.

“The current stagnation does not mean that Altcoins will be absent this cycle – instead, they may wake up as Bitcoin and Ethereum enter a consolidation phase,” he said.

However, Ding emphasized that any rally will be “highly selective” for favoring tokens “anchored to real-world utility and value creation, not just stories.”