The altcoin market is once again feeling the heat, with more than 40 percent of all altcoins being at their all-time low or close to it, according to a new report by CryptoQuant published on Monday.
The report says this level is even worse than the previous bear market, when the figure peaked at about 38 percent. The recent figures show that altcoins are now facing one of their weakest periods of this cycle.
CryptoQuant noted the broader market is still feeling the impact of geopolitical tension and the volatility it brings to financial markets. In this environment, altcoins have come under stronger pressure than Bitcoin.
The report states that the macro environment is already challenging for risky assets, but this is not the only factor for the decline.
Too many coins!
One of the main problems, according to the report, is the huge number of cryptocurrencies now in circulation. The firm said roughly 47 million crypto assets have been created so far.
Of that total, around 22 million were launched on Solana (SOL), more than 18 million on Base, and about 4 million on BNB Smart Chain.
That massive supply of tokens has spread liquidity too thin across the market. When money is divided among too many assets, smaller coins become more fragile and have a harder time holding value.
The report says this dilution in liquidity is one of the main reasons so many altcoins are now hovering near record lows.
“Such a massive number of cryptocurrencies directly leads to liquidity dilution, making altcoins increasingly fragile over time. This helps explain why we are currently seeing record levels of underperformance,” the report highlighted.
Altcoins struggling to keep up
The latest data indicates that altcoins are continuing to lag the overall crypto market. Bitcoin is continuing to hold the greatest investor interest. The overall crypto market is experiencing high levels of uncertainty and low risk appetite.
Some popular altcoins, for instance, are still trading very near to their lowest points ever. The Graph (GRT) and Tezos (XTZ) are both only 2.4 percent above their record lows, while Algorand (ALGO) is only 2.3 percent above its all-time low.
EOS, which is currently trading 4.85 percent above its all-time low, is likewise not far behind.
When compared with other altcoins, Bitcoin remained strong even during the volatility in March.
According to CoinMarketCap, on 1 March, the price of BTC was recorded at $67,006. The current price is $66,656, which is just 47.41 percent away from its all-time high of $126,198.
Despite the weak market, CryptoQuant said this setup could still create opportunities. In past cycles, deep altcoin underperformance has sometimes come before a rebound.
Largest altcoin holds key support levels
While pressure on altcoins has not gone away, Ethereum (ETH) is still holding near a critical support zone. The largest altcoin is currently trading at 2,060.
ETH price rose by 3.15 percent over the last 24 hours. The market capitalization is at 248.51 billion, and the daily trading volume is up 137.74 percent at 17.39 billion.
According to the widely followed market analyst who goes by the handle @alicharts on X, Ethereum is still maintaining its long-term ascending trendline, which has guided its price action in the past.
The current price is testing this trendline in the $1,800-$2,000 region, which is an area where buyers have entered in the past.
As Ethereum is considered the largest altcoin, this is an important support zone for the entire altcoin market. If it can hold above this region, we could potentially see a move back to the $4,900 resistance area, which is an area where past rallies have failed to sustain.
However, if the price falls below the trendline, the market structure could turn more bearish and increase the risk of a drop toward the $1,150 level.