Smaller cryptocurrencies are showing signs of recovery against both Bitcoin and traditional risk assets, with several altcoin market gauges breaking out of year-long downtrends. Analyst Matthew Hyland notes that ETH, Total 2, Total 3, and OTHERS have all confirmed higher highs, suggesting a potential turning point. However, rising leverage in perpetual futures markets, where altcoin open interest has overtaken Bitcoin’s for the first time since December 2024, raises the risk of a sharp correction. Zcash surged 370% from its June low to above $1,200, triggering $24 million in liquidations, while Dogecoin and BNB also posted strong gains. The conflicting signals leave investors weighing improved breadth against growing derivatives exposure.
The altcoin market may be approaching a turning point after several major gauges broke out of year-long downtrends, according to analyst Matthew Hyland. His charts suggest smaller cryptocurrencies are gaining ground against Bitcoin and traditional risk assets, although rising leverage also increases the odds of a painful correction.
In a post published on September 7, Hyland said ETH, Total 2, Total 3, and OTHERS had all confirmed the end of their year-plus declines by forming higher highs. Total 2 tracks altcoins excluding Bitcoin, while Total 3 removes both BTC and Ethereum, and OTHERS excludes the top 10 cryptocurrencies to focus on smaller tokens.
Hyland questioned whether the moves were simply a “bear market rally,” then followed up with a more bullish assessment. In another post, the market watcher wrote, “The largest #Altcoin Bull Run of all time is loading,” and argued it could be “much larger than 2020-2021.”
Data shows increased trading activity, with Coinalyze reporting that altcoin perpetual futures open interest had overtaken Bitcoin’s for the first time since December 2024. Altcoins outside the top 10 have pushed their combined market capitalization to $213 billion, up nearly 12% since the start of September.
Zcash has been a dramatic example, surpassing $1,200, up 370% from its early-June low. Its market cap moved above $20 billion, putting it ahead of Hyperliquid (HYPE) and Dogecoin (DOGE), both of which had gained over 11% in 24 hours. DOGE itself climbed 12% from its Friday low to $0.094, while BNB went close to $780, its highest level since early February.
But there’s a warning. ZEC perpetual futures open interest reached $2.7 billion per CoinGlass, while its move above $1,200 triggered $24 million in liquidations in the last 24 hours, more than $17 million of that being shorts. Historically, similar shifts in derivatives positioning have come right before corrections in mid-cap tokens.
That leaves two competing signals: the breadth of the altcoin move is improving, and several long-term charts have broken higher, but leverage is building quickly. As things stand, Hyland sees the first as evidence that the market could be entering a much larger altcoin phase.
