Analyses and data indicate that the crypto market is experiencing its most active altcoin season since early 2025, with many altcoins outperforming Bitcoin. However, behind this excitement lies a paradox. Most retail investors remain uneasy as their portfolios show little to no profit.
This article outlines the main reasons behind this situation.
Altcoin Market Cap Rises but Dominance Shrinks
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TradingView data shows that the TOTAL3 market cap (excluding BTC and ETH) reached a new high of over $1.1 trillion in September.
Yet the share of OTHERS (excluding the top 10) has declined since 2022, now standing at just 8%.
In past cycles, such as 2017 and 2021, TOTAL3 and OTHERS.D rose together. That trend reflected capital flowing not only into large-cap altcoins but also into mid-cap and low-cap ones.
The current divergence shows that capital is concentrated in stablecoins and a handful of top-10 altcoins such as SOL, XRP, BNB, DOG, HYPE, and LINK. Smaller altcoins receive far less liquidity, making it hard for their prices to return to levels where investors previously bought. This creates a situation where only a few win while most face losses.
Retail investors also tend to diversify across many coins instead of adding size to top altcoins. That explains why many portfolios remain stagnant despite a broader market rally.
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“Position sizing is everything. Many people hold 25–30 tokens at once. A 100x on a token that makes up only 1% of your portfolio won’t meaningfully change your life. It’s better to make a few high-conviction bets than to overdiversify,” analyst The De
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Author: Nhat Hoang
