Altcoin Market: Analysis of Trends from May to November 2025
Bitcoin Price Trends and Halving Cycle Impact
Since Bitcoin completed its latest halving in April 2025, it has maintained a range-bound consolidation. Historically, Bitcoin typically requires a 2-6 month 'cooling' period after halving before entering a bull market. Currently, prices hover in the $65,000-$68,000 range, viewed as a phase of support, which also accumulates energy for subsequent increases. Meanwhile, institutional funds continue to heavily buy into Bitcoin ETFs—recent products from BlackRock and Fidelity have added thousands of BTC. The influx of capital has impacted Bitcoin's supply, thus enhancing its price elasticity. Reports from CoinGecko and research from Glassnode indicate that the recent cost basis for Bitcoin holding addresses has risen, and long-term holders are absorbing at lower levels, showing that market confidence is strengthening (despite increased short-term volatility).
Overall, Bitcoin's current strength reshapes the market structure. Glassnode data shows that Bitcoin's market cap share has risen to 63%, a new high since 2021, indicating that investors prefer 'high-quality' assets like Bitcoin in an uncertain environment. Cointelegraph analysis suggests that in 2025, the capital structure will change, with much of the capital that might have flowed into altcoins being absorbed by Bitcoin ETFs ('capital remains in the ETF channel'). CoinDesk observed that in Q1 2025, Bitcoin's market cap accounted for 62.2% of the total market, while the market cap share of Ethereum and other altcoins decreased. This pattern indicates that most recent incremental funds tend to wait for Bitcoin to confirm its trend, suppressing the enthusiasm for altcoins.
Ethereum Price Trends and Ecological Impact
At the beginning of 2025, Ethereum's price experienced significant volatility. CoinGecko's report noted that Ethereum's price fell from $3,336 to $1,805 in Q1 2025, erasing all gains from 2024. Meanwhile, Ethereum's DeFi TVL also significantly retreated—its DeFi TVL dropped from $112.6 billion to $72.7 billion (a decrease of 35.4%). These changes have led to a challenge for Ethereum's relatively strong position: Coindesk data shows that the Ethereum/Bitcoin ratio fell to 0.022 in Q1, the lowest level since 2020. The flow of institutional funds has also shown differentiation: Bitcoin ETFs continued to see net inflows of over $1 billion, while Ethereum ETFs experienced a net outflow of $228 million in Q1. These trends imply that Ethereum's performance will remain weak in the short term, and its influence on the altcoin market will temporarily diminish.
However, there are still favorable factors in the Ethereum ecosystem. On the protocol side, Ethereum is about to launch an important upgrade (EIP-4844, namely Proto-Danksharding), which is expected to significantly improve the usability and efficiency of Layer-2. Multiple Layer-2 expansion networks have emerged in response: as of February 2025, the total locked value in the Ethereum Layer-2 ecosystem has exceeded $42 billion. Among them, Arbitrum's locked value has surpassed $13 billion, and Coinbase's Base L2 has also exceeded $11 billion. These scaling protocols have significantly reduced user transaction costs and improved throughput, attracting a large number of DeFi protocols and users to migrate from the mainnet. In other words, Ethereum and its Layer-2 networks are forming a multi-chain interconnected ecosystem, providing more application scenarios and growth momentum for future altcoins (especially tokens based on Ethereum). The increase in developer and user activity will create potential value-added opportunities for altcoins within the Ethereum ecosystem.
Changes in Capital Flows (Mainstream Coins vs. Altcoins)
Market funds are currently primarily concentrated in leading assets such as Bitcoin, Ethereum, and stablecoins. Glassnode data shows that in Q1 2025, Bitcoin and Ethereum spot ETFs continued to attract capital, with the Bitcoin ETF nearing $125 billion; during the same period, the total supply of stablecoins and on-chain transaction volume both reached historical highs, indicating that many investors are converting funds into dollar-denominated assets to wait and see. Cointelegraph notes that Bitcoin ETFs have become 'filters' for mainstream funds, with much of the capital that would have flowed into altcoins now being absorbed by ETF channels. CoinDesk also observed that in Q1 2025, Bitcoin's market cap share climbed to 62.2%, while Ethereum ETF funds saw net outflows. These signs indicate that the market is in a conservative risk-averse environment, with speculative funds temporarily flowing to larger leading assets.
Weekly chart of total market capitalization of altcoins (excluding Bitcoin). The chart shows that the altcoin market cap is currently operating along a descending channel, and CoinGecko's analysis predicts that this metric may first drop to around $810 billion to find a bottom before rebounding to historical highs (around $1.62 trillion). This implies that as long as the macro and market sentiment improves, suppressed altcoins may experience a significant rebound in the second half of the year, leveraging the effects of a bull market.
Activity Levels and Investment Trends in Popular Sectors
DeFi Ecosystem: CoinGecko's report indicates that total locked value (TVL) in multi-chain DeFi fell from $177.4 billion in Q1 2025 to $128.6 billion, a decline of 27.5%. Ethereum's DeFi TVL share dropped from 63.5% to 56.6%, with absolute scale decreasing from $112.6 billion to $72.7 billion. DeFi TVL on Solana and Base chain also shrank due to falling token prices. Overall, the DeFi sector has experienced an adjustment following the three-year bull market from 2019-2021, with short-term TVL under pressure. However, it is noteworthy that new chain projects are still attracting funds: for example, Berachain's TVL rapidly grew to $5.2 billion in the first quarter after launching in February 2025, indicating that innovative products can still quickly gain liquidity.
GameFi Games: The activity of gaming-related on-chain projects has not yet recovered to the peaks of 2021. Cointelegraph reported that under the current circumstances, about 60% of players drop out within 30 days, reflecting a lack of lasting gameplay incentives and good user experience in many games. The industry generally recognizes the need to enhance game quality and economic models: in the future, GameFi may incorporate more new technologies like generative AI (as suggested by Cointelegraph) and adopt more sustainable token incentive mechanisms. If high-quality large-scale Web3 games emerge in 2025, their ability to attract users could be promising. However, in the short term, most existing GameFi projects remain in a restructuring and filtering phase.
Layer 2 Expansion: Ethereum's Layer-2 networks continue to expand and attract investments. OurCryptoTalk pointed out that as of February 2025, Ethereum's Layer-2 locked value has exceeded $42 billion. Major L2 projects show impressive data: Arbitrum's TVL exceeds $13 billion, Base's TVL exceeds $11 billion, and Optimism's is around $5 billion. The maturity of scaling technology and low fee policies have driven this trend. The Ethereum Dencun upgrade further reduces on-chain data fees, creating conditions for the development of the Layer-2 ecosystem. As more applications (DeFi, NFTs, games, etc.) migrate to L2, these scaling networks have become important platforms for altcoin projects, attracting a large influx of user funds (the activity level of the Solana ecosystem has also significantly increased). The improvement of Layer-2 and cross-chain technologies will benefit some altcoins (especially popular DeFi projects) due to lower costs and larger-scale application scenarios.
Impact of the Macroeconomic Environment
Monetary Policy and Liquidity: The Federal Reserve maintained its position in March 2025, but decision-makers expressed concerns over signs of economic slowdown, with the market generally expecting rate cuts to begin as early as June. Falling interest rates typically push down the dollar and increase market liquidity, thereby enhancing the attractiveness of risk assets. CoinShares strategy officer Meltem Demirors pointed out that when real interest rates decline, Bitcoin's appeal as a macro hedge asset increases. Therefore, if the Federal Reserve shifts to a dovish stance as anticipated, crypto assets (especially Bitcoin and altcoins with stable revenue models) may benefit. However, caution is warranted: if rate cuts stem from concerns over an economic recession, risk appetite may shrink, putting pressure on the crypto market.
Dollar Index and Risk Appetite: In early 2025, the U.S. dollar index (DXY) fell sharply by about 9%; traditionally, this tends to favor gold and Bitcoin: Binance research shows that during past similar dollar downturns, Bitcoin has averaged a 43% increase. However, this year Bitcoin has only slightly retraced, indicating that its trend has become more synchronized with risk assets like the stock market. In other words, when global market risk appetite rises (e.g., stock market increases, trade tensions ease), crypto assets may also receive a boost; conversely, during risk-averse periods, crypto often declines sharply with other risk assets. Experience shows that during the early stages of an economic crisis, when investors need to liquidate quickly, crypto assets are often the first to be sold off—for example, in the early days of the pandemic in 2020, Bitcoin plummeted over 50% in two days. Therefore, over the next six months, the trends of the dollar, global risk sentiment, and macro indicators like U.S. Treasury yields will significantly impact Bitcoin and altcoins.
Industry Experts and Institutional Perspectives
Different institutions have varying opinions on future trends:
CryptoQuant (Ki Young Ju): CryptoQuant founder Ki Young Ju expressed on social media that in 2025, most altcoins are unlikely to escape elimination, with only those possessing strong fundamentals, revenue models, and potential ETF opportunities likely to perform well. He warns that 'the era of a comprehensive bull market is over,' and the future market will be more selective. This view reflects concerns about the current market structure adjustment.
Glassnode & Coinbase: The jointly released report (Charting Crypto Q2 2025) maintains a cautious attitude towards the coming months. The report points out that Bitcoin's dominance has increased to 63%, marking a refocus of institutional capital on high liquidity assets. They also mention that stablecoin liquidity has hit a record high. Overall, Glassnode emphasizes that the current market is in a 'reset' phase and that macro signals and on-chain inflow metrics need to be monitored.
Other Analysis Institutions: Some research institutions and the market believe there is still bull market potential in the second half of the year. Steno Research expects 2025 to be the 'best year in history' for the crypto market, with both Bitcoin and Ethereum reaching new historical highs; platforms like Polymarket are mostly betting on new highs by the end of the year. Investors like VanEck predict that if the bull market continues throughout the year, Bitcoin may reach about $180,000 and Ethereum $6,000 by the end of the year. These optimistic expectations are based on historical bull market patterns and policy easing.
CoinGecko et al.: CoinGecko's Q1 report shows that the market is currently undergoing a deep adjustment, analyzing that if macro conditions ease, the market cap of altcoins may rebound strongly after hitting a low. They also note the relative activity of ecosystems like Solana: for example, in Q1 2025, Solana accounted for nearly 40% of on-chain DEX trading volume, with its protocol revenue surpassing the combined total of all other L1/L2s, demonstrating that some popular sectors possess resilience.
Consensus: Although expectations vary, most analysts believe there is still a bull market opportunity in the second half of 2025: as long as the macro environment improves (e.g., interest rates shift, the dollar weakens), and market risk sentiment warms up, leading altcoins are expected to rise along with Bitcoin and Ethereum. On the other hand, experts generally believe that competition will be more intense in the new cycle, and projects that lack institutional recognition or application scenarios may be eliminated by the market. In summary, the altcoin market will remain in a phase of fluctuations and differentiation in the coming months, with the performance of the overall market and hot sectors determining whether a broad bull market truly arrives.
Reference: The above analysis integrates the latest reports and article data from multiple institutions and analysts including Glassnode, Coinbase, CryptoQuant, CoinGecko, Cointelegraph, and CoinDesk. The cited materials aim to illustrate trends and viewpoints and do not constitute investment advice.
