The crypto market was in turmoil in October, with altcoin market capitalization dropping another 15%, but the month is not over yet. Could this economic downturn get even worse by the end of October?
Recent data and analysis reveals tips investors can use to assess risks and opportunities during this sensitive period.
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With more than 70,000 altcoin inflow transactions, the decline may become more serious
This decline is not just a result of short-term volatility. This also reflects increased selling pressure and weakening demand from investors.
One of the clearest signs is that the number of altcoins being sent to exchanges has skyrocketed, reaching its highest level this year.
According to data from CryptoQuant, the seven-day average of altcoin inflow transactions is over 70,000. In early 2025, a similar surge in inflow activity coincided with significant price declines for Bitcoin and altcoins.
“Transactions sending alts to exchanges just hit a year-to-date high, indicating either increasing selling pressure or traders preparing for the next big rotation,” Coin Bureau noted.
An increasing amount of altcoins moving to exchanges could indicate a redistribution rather than an immediate price drop. However, stablecoin data can help you get a complete picture of market sentiment.
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Weakening stablecoin inflows suggest declining purchasing power
CryptoQuant stablecoin CEX flow data shows that while net flows remain positive, they have declined sharply since mid-September and were close to zero in October.
A decline in stablecoins moving to exchanges signals a decline in potential purchasing power. Coupled with a surge in altcoin supply on exchanges, this imbalance could amplify downside pressure.
In late 2024, stablecoin net flows similarly declined ahead of a broader market correction.
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The USDT.D index, which tracks Tether’s dominance in market capitalization, supports this argument. It is up over 5%, indicating that stablecoins are not being introduced to increase altcoin prices.
According to Altcoin Vector, recent liquidation events have increased USDT’s dominance. This is a pattern that historically coincides with sharp declines in altcoins.
“The tight dance between alts and liquidity has failed. Recent deleveraging events have increased USDT’s dominance, and historically all such moves have coincided with sharp declines in alts,” Altcoin Vector commented.
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Signs of a potential bottom amid widespread weakness
These indicators suggest that altcoins may struggle to recover quickly from the large-scale liquidation events that recently rocked the market.
However, technical analyst Marline believes altcoins may be nearing the bottom of the cycle. His opinion is based on the MACD cross signal, which has only appeared three times in the past eight years, each marking the beginning of an altcoin supercycle.
History shows that such moments often led to strong backlash.
Even so, be cautious with your optimism. While positive technical signals can emerge during the market’s darkest moments, the current bearish indicators cannot be ignored.
Investors may need to weigh both sides carefully as October unfolds, a month well remembered for its volatility and turning points.
