Crypto Market Shifts: Altcoin Deposits Surge Amid Bitcoin Dominance Decline
A sharp rise in altcoin deposits on crypto exchanges signals potential selling pressure, even as capital begins shifting from Bitcoin toward specific sectors like DeFi and AI.
The recent surge in Bitcoin is beginning to generate signs of a shift in the crypto market. According to blockchain analytics data, the number of deposit transactions to exchanges for altcoins reached approximately 78,000 within seven days by September 28, a 160% increase compared to about 29,800 transactions on September 14. Simultaneously, the number of addresses sending altcoins to exchanges nearly tripled, rising from around 17,600 to roughly 51,600.
Potential Selling Pressure vs. Capital Rotation
These figures are not necessarily a sign of impending price increases. Network researchers note that when investors transfer coins to exchanges, a primary potential reason is preparation for sale. Therefore, the sharp rise in deposits may also indicate potential selling pressure. On the other hand, the same period is accompanied by signs that capital in the market is starting to gradually shift from Bitcoin to other assets. Bitcoin's market share remained below 60%, while currencies outside the top ten reached a market share of approximately 9% of the total crypto market capitalization on September 27, the highest level since February.
"Investors are focusing on narratives and specific ecosystems rather than buying blindly across the board."
At the same time, additional data indicates that some altcoins have already recorded sharp gains. According to Cointelegraph, over the past 30 days, PONS rose by more than 350%, Uniswap's UNI by over 110%, Arbitrum's ARB by more than 150%, and NEAR by about 180%. Privacy-focused coin Zcash also crossed the 1,600 dollar threshold last week. However, these assets differ significantly from one another, meaning the rallies do not necessarily reflect a uniform trend across the entire altcoin market.
Evolving Investor Focus
One of the most prominent changes in the current cycle is the type of projects attracting attention. According to David Hoffman, a decentralized finance podcast host, coins such as ARB, UNI, JUP, and ONDO share a significant characteristic: the protocols behind them generate revenue. Similarly, Sergey Kunz, co-founder of 1inch, points out that alongside meme coins, investors are directing attention toward DeFi, privacy coins, artificial intelligence projects, and tokenized assets.
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Top ten altcoins currently account for about 80% of total altcoin market capitalization.
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CoinMarketCap's Altcoin Season Index stood at 64 out of 100 at the end of September.
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A threshold of 75 is required to officially declare an altcoin season.
Instead of broadly purchasing almost any altcoin, investors are concentrating on specific narratives and ecosystems. September data points to a significant buying bias, but capital remains concentrated in a relatively small number of assets. The top ten altcoins currently represent about 80% of the altcoin market capitalization, compared to roughly 70% at the end of 2024.
Ultimately, the central question in the market is not just which coins will rise, but what type of projects will attract the next wave of capital. If the current trend continues, investors may keep seeking projects with tangible revenues, utility, and active products, alongside hot sectors like DeFi, artificial intelligence, privacy, and tokenization. However, the rise in exchange deposits serves as a reminder that even amid talks of an altcoin season, some investors might actually be preparing to realize profits.
