Approximately 40% of altcoins are trading near their all-time lows, according to CryptoQuant analysis. The bear cycle has intensified underperformance, with Bitcoin struggling above $60,000. Low liquidity is a major driver despite over 53.5 million cryptocurrencies existing and 60,000 new ones added daily. Analyst Darkfost warns that without strong incoming liquidity, most projects are doomed to fail. CryptoQuant founder Ki Young Ju previously noted that altseason would not play out as expected due to a lack of fresh liquidity. Investors must be highly selective, as only a few projects will survive the bear phase.
A report from market analysis platform CryptoQuant revealed that about 40% of altcoins are currently trading around their all-time low. This dynamic reflects an extreme level of underperformance among most projects.
According to CryptoQuant analyst Darkfost, the extreme underperformance reflects the harsh reality facing projects that chose to launch tokens. He said he initially built the Percentage of Altcoins Near ATL chart to visualize coins trading below 25% of their all-time low, only to see that at least 40% of these assets are trading near their respective bottoms.
As the bear season progresses and Bitcoin declines further, altcoins’ performance worsens. When BTC fell below $60,000 last month, the percentage of altcoins near their ATL climbed to 45%.
One of the major drivers of this underperformance is the low liquidity despite thousands of coins being created daily. CoinMarketCap data shows 53.5 million cryptocurrencies currently exist, with 60,000 new ones added every day. The majority of these assets are doomed to fail because of the state of the market and a growing lack of liquidity.
Darkfost explained: “Without strong incoming liquidity, it’s easy to see why the majority of these cryptos are doomed to fail.”
He says it is now essential for investors to be highly selective of the projects they choose to be exposed to. The crypto market has changed, and only a few projects will survive the bear phase.
His comments echo similar remarks from CryptoQuant founder Ki Young Ju made in early December 2024 during the last bull cycle. At the time, the altcoin market sentiment was good, and multiple coins were skyrocketing to multi-year highs. Ki Young Ju believed the altseason would not play out as investors expected because the sector was not seeing a notable inflow of fresh liquidity.
As Ju predicted, only a few assets recorded significant gains during that period. The lack of liquidity hampered the growth of other assets, and this low liquidity has intensified in the bear season, causing most altcoins to perform even more poorly.
