Shifting Dynamics in the Altcoin Market

Declining Altcoin Depth

Recent analysis from CoinDesk Research reveals a concerning trend in the altcoin market. As of January 1, 2025, the dollar depth for a basket of altcoins hit its peak, but this figure has been decreasing consistently since then. Currently, the market’s depth at a 5% variance from the price has diminished by approximately one-third, bringing it down to around $2 million. Moreover, the depth measured at 1% has also experienced a significant reduction of about one-sixth.

While the depth in terms of token units appears relatively stable, having reached its zenith at the beginning of 2025 with only modest declines thereafter, analysts caution that this recovery in token units might be misleading. The improvement is largely attributed to falling prices, which obscure a persistent decline in the overall committed capital in the market.

Spot Trading Volumes Decrease

In terms of spot trading, the volume continues to languish significantly. According to data from CoinDesk Research, centralized exchanges averaged around $279 billion in weekly spot trading over the four weeks leading up to September 27, which is a striking decline of nearly two-thirds from the $801 billion recorded during the crash week.

The lowest point for trading activity occurred in August, when weekly volumes plummeted to about $135 billion, although there’s been a doubling of this figure since then. Nevertheless, these current volumes are still far from the levels experienced prior to the market downturn.

Implications for the Future

The stark reduction in liquidity witnessed since October 10, 2025, raises critical questions about the altcoin ecosystem. Joshua de Vos, Research Lead at CoinDesk, noted, “A year ago, we wrote that liquidity was thin and fragmented, and that it was unclear where capital would rotate once the dust settled. We now have an answer: bitcoin and ether.”

According to de Vos, market makers have returned to focus on major cryptocurrencies, with liquidity levels surpassing those recorded before the market crash. In contrast, overall liquidity for altcoins continues to decline. This trend suggests that, aside from a few standout altcoins, the existing divergence in market interest and trading volume may persist well into the next year, indicating a stronger institutional preference for leading cryptocurrencies.