Altcoin Season Loses Steam as Traders Turn Cautious

Data from CryptoQuant indicates that appetite for riskier tokens is fading, with large holders adjusting their strategies and the market’s favorite sentiment gauge beginning to roll over.

Whales Step Back From Ethereum

Ethereum has been at the center of this shift. The second-largest crypto dropped below $4,200 after retreating more than 6% in recent days. Analysts highlighted a whale wallet unloading nearly $73 million in ETH ahead of the dip, while another 420,000 ETH was transferred off exchanges.

On one hand, those withdrawals reduce immediate selling pressure. On the other, they suggest big investors are more comfortable keeping assets in cold storage than leaving them in liquid markets — a defensive posture as volatility climbs.

Altcoin Season Index Rolls Over

The so-called Altcoin Season Index, which tracks when altcoins outperform Bitcoin, has slipped to 64 from 69 the week prior. That still puts the market in “altseason” territory, but the direction has shifted. September’s peak near 75 marked the strongest reading since last year, yet momentum has since cooled.

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The swings are not unusual. The index soared to 87 at the end of 2024 before collapsing to 12 by April 2025. The current decline, while milder, suggests traders are booking profits and positioning more cautiously as the year’s final quarter begins.

Capital Flows Still Elevated

Despite the retreat, overall market cap growth remains impressive. Altcoins collectively grew from $1.2 trillion to $1.7 trillion over the past three months, led by majors such as ETH, SOL, and ADA, as well as emerging tokens tied to newer narratives.

CryptoQuant’s read is that the bull cycle is not over — just that participants are shifting gears. Gains are being taken off the table, hedges are going up, and capital is being parked in safer corners of the market. For now, the altcoin conversation remains alive, but traders are clearly bracing for a bumpier ride into year-end.

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