Altcoin investors may end 2025 without seeing profits in their portfolios. However, many analysts remain optimistic even though the market capitalization of the altcoin market (TOTAL2) has dropped 30% from this year's peak.
Why do analysts believe that the altcoin market is nearing its final phase? The following points highlight the most important reasons.
Why altcoins are in a phase of opportunities
Firstly, CryptoQuant data shows that only about 3% of altcoins on Binance are trading above the 200-day moving average. This level is historically low.
CryptoQuant analyst Darkfost believes that a lack of liquidity and cautious investors are the biggest reasons. Investors are now focusing on preserving their capital instead of betting on risky assets.
The fact that most altcoins are trading far below their long-term averages means that pessimistic sentiment makes the market undervalued. A new BeInCrypto analysis shows that altcoins like XRP, TON, and ADA have strong fundamentals, yet their prices have not recovered.
Despite the bleak situation, historical comparisons show that weak periods often provide good buying opportunities for patient investors.
"Even though it feels unexpected, such periods often provide the best opportunities. This phase can last quite a while, especially if the market enters a long bear phase," says Darkfost.
Secondly, fear and lack of interest among small investors often create good buying opportunities. Large investors often choose to buy in at that time.
Renowned analyst CrediBULL Crypto highlights this as an important sign that the market has bottomed out. In a new post, he emphasizes that attention, not capital, comes first.
When small investors lose interest, large players start buying. When the first green lights appear, small investors' interest gradually returns. Their activity increases in the next phase of the movement.
Technical signals indicate a possible bottom.
Thirdly, several technical indicators suggest that the bear market for altcoins may soon be over. Well-known market analyst Michaël van de Poppe says that the current market value for altcoins acts as strong support. He calls the area a 'zone to hold on to.'
"It seems we are at an important support area. It is wise to stay here. Strong recovery indicates that we may soon see green lights," predicts Michaël van de Poppe.
More signals strengthen this picture:
The capital share of the altcoin market, excluding the top 10, compared to Bitcoin is at its strongest support point since 2017.
Altcoin dominance is at levels seen during the COVID crisis, which has previously been followed by strong recovery.
These factors suggest that altcoins may be in the final phase of the decline. BeInCrypto analysis therefore shows that a DCA strategy could be effective if one starts in December.
But some analysts warn of risks. They believe that an altcoin period may not come until 2026. Venture capital continues to be weak, and market sentiment may take a long time to recover.
