Why Altcoin Season Peaks But Investors Still Struggle to Profit

Analyses and information point out that the crypto market is experiencing its most lively altcoin season since early 2025, with many altcoins outperforming Bitcoin. However, behind this pleasure lies a paradox. Most retail buyers stay uneasy as their portfolios present little to no revenue.

This article outlines the principle causes behind this case.

Altcoin Market Cap Rises however Dominance Shrinks

TradingView information reveals that the TOTAL3 market cap (excluding BTC and ETH) reached a brand new high of over $1.1 trillion in September.

Yet the share of OTHERS (excluding the highest 10) has declined since 2022, now standing at simply 8%.

In previous cycles, akin to 2017 and 2021, TOTAL3 and OTHERS.D rose collectively. That pattern mirrored capital flowing not solely into large-cap altcoins but in addition into mid-cap and low-cap ones.

The present divergence reveals that capital is concentrated in stablecoins and a handful of top-10 altcoins akin to SOL, XRP, BNB, DOG, HYPE, and LINK. Smaller altcoins obtain far much less liquidity, making it exhausting for his or her costs to return to ranges the place buyers beforehand purchased. This creates a state of affairs the place only some win whereas most face losses.

Retail buyers additionally have a tendency to diversify throughout many cash as an alternative of including measurement to prime altcoins. That explains why many portfolios stay stagnant regardless of a broader market rally.

“Position sizing is every thing. Many individuals maintain 25–30 tokens directly. A 100x on a token that makes up only one% of your portfolio gained’t meaningfully change your life. It’s higher to make just a few high-conviction bets than to overdiversify,” analyst The DeFi Investor said.

Altcoin Index Surges however Investor Sentiment Remains Cautious

The Altcoin Season Index from Blockchain Center now stands at 80 points. This signifies that over 80% of the highest 50 altcoins outperformed Bitcoin previously 90 days—a clear sign of altcoin season.

However, the Fear & Greed Index is at 52, a impartial stage reflecting warning and no clear directional bias.

Historical information reveals that the 2024 rally drove each indicators increased. At that point, the Altcoin Season Index climbed above 75, whereas the Fear & Greed Index soared previous 80, displaying excessive greed. The parallel rise mirrored investor confidence as capital rotated strongly into altcoins. But that isn’t occurring now.

Retail warning appears to stem from classes discovered in previous cycles, the place altcoins spiked then collapsed quickly due to FOMO and mass sell-offs. New elements akin to Fed rate decisions, tax impacts, and geopolitical tensions can also contribute to hesitation.

“This isn’t an ‘everybody will get wealthy’ market anymore. It’s participant vs. participant, particularly with the present macro atmosphere,” analyst Luca emphasized.

The Number of Altcoins Has Increased Tenfold Since 2021

Although the TOTAL3 market cap is close to its 2021 peak, the context has modified dramatically. CoinMarketCap experiences that in 2025, greater than 21 million altcoins can be tracked—100 instances greater than the roughly 20,000 cash in 2021.

Dune data highlights the token explosion from 2017 to 2025, with distinctive tokens skyrocketing, particularly on Ethereum, Solana, and Base.

This creates a way more selective atmosphere. In 2021, buyers may revenue extra simply with fewer cash as a result of competitors was decrease. With tens of thousands and thousands of tokens spanning DeFi, meme cash, and AI tokens, selecting the correct one is as tough as discovering a needle in a haystack.

“Back in 2021, the altcoin universe was small and nearly each coin caught a rally—even the junky ones. Now in 2025, the sport has modified. There are a whole lot of instances extra altcoins. With such an oversupply, the percentages that your random small-cap will magically 100x are close to zero,” analyst Nonzee explained.

Most new tokens fail rapidly due to low liquidity, rug pulls, or intense competitors. Retail buyers, who typically unfold capital throughout many small-cap tokens, now face increased dangers. This leads to both losses or very modest returns, whilst the general market surges.

These three elements clarify why the September 2025 altcoin season feels incomplete. To overcome this, buyers may have deeper analysis, a deal with basically sturdy tasks, and a reconsideration of excessive diversification.

The submit Why Altcoin Season Peaks But Investors Still Struggle to Profit appeared first on BeInCrypto.