What is altcoin doing wrong? Discover the reasons holding back the big bullish wave.

In 2025, Bitcoin bounced back strongly, but altcoins have not yet found their momentum for recovery. Most assets continue to fluctuate around important resistance levels. Analysts believe that some structural issues still hinder the explosion of altcoins in the past.

Speculation platform and volatility hinder the price increase of Altcoin

One of the biggest factors pointed out by analyst Ash Crypto is the strong development of speculative platforms, such as Pump.fun. He argues that these platforms attract liquidity from the broader cryptocurrency market, slowing down the price increase process of altcoin.

It is noteworthy that these platforms often offer short-term incentives and high-risk mechanisms, making it difficult for emerging or newly established altcoin projects when they lack sufficient liquidity to grow. As money flows into speculative projects, the altcoin market loses stable investment sources, thereby reducing the potential for long-term growth.

In addition, the emergence of meme coins has also contributed to the disruption. A series of tokens are issued and quickly fail within 24 hours, many of which use the "rug pull" strategy to scam. These events cause retail investors to lose faith and no longer participate in the altcoin market, or if they do, they become more cautious.

As a result, buying pressure has decreased, causing the price increase of altcoin to be delayed.

Pressure from high FDV listing creates early sell-off

In addition, the increase in fully diluted value tokens (FDV) that are high is also a factor hindering the price increase of altcoin. New projects with implemented utilities but having an overvalued market cap often only benefit early-stage investors and internal teams.

When these tokens are listed and begin trading, early investors will sell off a large portion of their shares, putting immediate downward pressure on the price. Furthermore, this sell-off not only affects the value of the tokens but also undermines investor confidence. In particular, retail investors, those who participate after the tokens have been listed, often suffer the most significant losses.

As the number of high FDV projects continues to rise, skepticism towards new token listings has also increased, making subsequent investments more challenging.

This creates a vicious cycle, reducing the participation of long-term investors and increasing short-term trading sentiment in the altcoin market.

Leverage trading increases volatility

In addition, the increase in leveraged trading on both centralized and decentralized exchanges also contributes to increased volatility in the market. Traders nowadays often hold high-risk positions, leading to significant fluctuations in the short term.

Strong fluctuations and liquidation waves cause prices to change erratically, which not only undermines market stability but also discourages long-term investors. Ash Crypto warns that excessive leverage negatively impacts the true value determination of assets. When the trading ratio is higher due to leveraged trades instead of actual buy and sell transactions, price action becomes unpredictable and volatile.

This makes it difficult for altcoins to establish and maintain support levels, a necessary factor for creating a stable price increase. Therefore, the altcoin rally 3.0 has not yet been able to form, and the market has not been able to break out of the stagnation phase.

Positive signs for the bounce back of Altcoin

Although the current market is facing quite a few challenges, the technical indicators are gradually revealing a potential change that may be about to occur.

According to the latest analysis from CryptoBusy, the altcoin market is in a consolidation phase within a descending channel, but it still maintains a strong macro uptrend. This structure is very similar to what has occurred in previous cycles, leading to strong price surges of altcoins.

In particular, the market capitalization of altcoin, excluding Bitcoin and Ethereum, remains stable on the long-term upward trend, which has maintained the strength of the market since the beginning of 2023. According to analysts, when the market breaks out of the current range and this trend line continues to hold firm, a new wave of buying may be about to restart.

In addition, an expert from CryptoELITES believes that the third quarter of 2025 could be a crucial phase for the bounce back of altcoin. Based on the Total2 market capitalization trends, this expert asserts that historical post-halving cycles often lead to a strong price surge for altcoin in the third quarter, with previous altcoin seasons yielding profits of up to 50 times for many assets.

The chart also indicates a repeating pattern in the three previous market cycles. All three began with the halving of Bitcoin, followed by modest growth in Q1 and Q2, and finally a strong surge of altcoin in Q3.

With the repetition of the current cycle, analysts believe that the third quarter of 2025 could mark the beginning of the next altcoin bull run.

Emma