Matrixport Research: Why is the Altcoin Bull Market Absent? Supply Pressure and Token Unlocking are Key Variables

In the past year, the anticipated altcoin market did not materialize as expected. In previous cycles, Bitcoin's rise typically led to capital outflows, gradually transmitting to the altcoin sector. However, in this cycle, this transmission mechanism has clearly weakened. Retail participation remains low, with many projects lacking new narratives to drive the market and failing to provide solutions with real application value. At the same time, the continuous selling by early investors and the new supply brought about by token unlocks are constantly suppressing the market. Against this backdrop, the overall performance of altcoins continues to be under pressure, and investor sentiment is generally frustrated. Nevertheless, there are still varieties in the market that show periodic strength, and such opportunities can often be identified through certain market structure signals.

Supply Pressure Continues to Release: Altcoin Upward Momentum Limited

Since October 2025, although Bitcoin has experienced periodic corrections, its market dominance has not significantly declined and has recently risen again. This round of market activity seems to be dominated by Bitcoin, which has led to periodic follow-up rises in altcoins. Meanwhile, an increasing number of companies adopting treasury allocation strategies continue to accumulate Bitcoin, keeping its structural demand solid.

In contrast, altcoins face more pronounced supply pressure. Early investors are continuously releasing their holdings, and the new circulating supply from token unlocks frequently limits the market's rebound due to selling pressure. Since August 2024, approximately $99 billion worth of tokens have been unlocked and entered circulation, bringing a continuous supply shock to the market.

As retail participation cools, the impact from the supply side is gradually becoming a key variable driving price trends. This also explains why, in this bull market from 2024 to 2025, altcoins not only underperformed Bitcoin but their overall market value even failed to reach the peak of this cycle.

Unlocking Window and Market Structure: Periodic Rebounds Still Possible

Historical experience shows that large-scale token unlocks often improve market liquidity in the short term and boost trading activity. In many cases, altcoins experience periodic rebounds around the unlocking window, which includes both increased buying capacity due to higher trading volumes and the reallocation of funds within the sector.

Next week, approximately $4.7 billion worth of tokens are expected to be unlocked, marking the third-largest unlocking week since August 2024. Historical data indicates that during similar scale unlocking windows, the crypto market often sees rebounds in the weeks leading up to the unlock, while the overall market value tends to peak shortly after the unlock.

However, this round of rebound seems to have started about a week early, indicating that its impact may be weaker than in previous instances. The current unlocking scale is mainly concentrated in a few protocols, with the vast majority coming from the European crypto exchange WhiteBIT's platform token, WhiteBIT Coin. Although the fully diluted valuation (FDV) of this token is approximately $16.6 billion, its average daily trading volume is only about $74 million, suggesting that the relatively limited trading scale may also lead to disproportionate price volatility.

Overall, a practical market indicator based on historical experience is the deviation of the total market value of altcoins relative to the 90-day moving average. When the total market value exceeds the 90-day average by more than 50%, the market typically enters a phase of overheating; conversely, when it falls below the 90-day average by about 30%, tactical rebounds are more likely to occur. The current market structure indicates that the selling pressure on altcoins may be gradually approaching an excessively released range.

In summary, the altcoin market is at a critical stage. Structurally, the sector still faces dual pressures: on one hand, overall retail demand is weak, and on the other hand, token unlocks and early investor sell-offs continue to suppress the supply side. This structural characteristic has significantly weakened the traditional transmission path of "Bitcoin's rise driving altcoin rebounds" in this cycle.

The above opinions are derived from Matrix on Target. Contact us to obtain the complete report of Matrix on Target.

Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.