The brief surge in altcoin prices has faded quickly, according to analysis shared by crypto analyst Darkfost. Altcoin market capitalization, excluding Bitcoin and stablecoins, climbed by $320 billion from mid-August through the end of September. However, much of that advance has since been wiped out.
A broad rebound had lifted most assets listed on Binance, and in mid-August, 82% of those altcoins sat below their 200-day moving average. By early October the figure had dropped to just 10%, as such, nearly 90% traded above the long-term technical level and pointed to improving momentum.
That strength reversed as macroeconomic and political conditions worsened, and geopolitical and trade tensions remained elevated. Notably, the Federal Reserve, the European Central Bank, and the Bank of England all raised interest rates.
Additionally, midterm election results saw Democrats lose both chambers of Congress, thus adding further uncertainty.
Meanwhile, Equity markets witnessed a massive sell-off, with technology shares hit hardest. Former President Donald Trump linked the decline to the election outcome. The Nasdaq has fallen 14% from its recent peak, compared with a 6% drop for the S&P 500.
Altcoins suffered in the risk-off move as their total market capitalization declined by roughly $200 billion, erasing nearly two-thirds of the earlier gains. On Binance, about 70% of altcoins now trade below the 200-day moving average, a level approaching the 80% seen earlier and underscoring broad weakness.
The shift from the early October picture has been rapid, turning a widespread rally into a correction across most of the sector. Extreme readings of this kind have at times marked turning points in the past.
At report time, CoinMarketCap’s Altcoin Season Index currently stands at 38. The reading means 38% of the top 100 altcoins have outperformed Bitcoin over the past 90 days. This sits well below the 75 threshold that signals altcoin season and above the 25 level associated with Bitcoin season, reflecting a mixed market still tilted toward Bitcoin leadership.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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