Altcoins Rebound on Trump-Xi Hopes, CLARITY Act Progress, but Inflows Remain Limited

Altcoins, which staged a short-term rebound on expectations for a summit between U.S. President Donald Trump and Chinese President Xi Jinping and progress in deliberations on the CLARITY Act, are now taking a breather as the market searches for direction. Trading volumes have recovered, but the lack of clear, sustained inflows suggests investors should brace for heightened near-term volatility.

"Altcoins Diverge Sharply by Token as Trading Volumes Recover"

The altcoin market remains highly selective, with weekly returns showing a widening gap between individual tokens.

CoinMarketCap data on May 15 showed strong gains over the past week in BILL (+158%), UB (+97.4%), KITE (+30.4%) and XDC (+21.4%). By contrast, losses deepened in tokens including TON (-21.5%), SIREN (-51.2%), SKYAI (-38.9%) and STRK (-17.7%).

Smaller-cap tokens led many of the sharpest advances. TROLL (+147%), Q (+101%), DAG (+87.7%) and IRYS (+80.56%) were among the standout gainers, indicating that short-term capital is quickly rotating into low-liquidity areas of the market. Overall, trading has been driven more by token-specific supply and demand than by any broad market trend.

Over the same period, total cryptocurrency market capitalization rose to about $2.67 trillion, according to CoinMarketCap, up more than 13% from about $2.36 trillion in early April. The broader market is expanding even as performance dispersion across tokens widens.

The altcoin-led rebound has revived speculation about a broader recovery in the sector. CryptoQuant said on May 15 that altcoins' 30-day average trading volume had begun to move above the 365-day average. Cointelegraph wrote that altcoin momentum is building and investor optimism is reviving, fueling expectations that an altseason may be approaching.

The indicator appears when the 30-day average trading volume of altcoins on centralized exchanges rises above the 365-day average. A similar pattern emerged during the 2021 bull market and was followed by gains in Ether and major altcoins. That has raised hopes that capital rotation could again gather pace. The recovery in trading volume is also being interpreted as a sign of improving risk appetite rather than a simple technical bounce.

"On-Chain Recovery Signals Clash With Macro Risks as Doubts Linger Over Rally"

On-chain indicators are showing signs of recovery, but the market remains cautious about calling it a structural rebound.

Altcoins have recently risen on expectations for a Trump-Xi summit and news that the CLARITY Act passed the Senate Banking Committee. Still, the bill must clear major steps including a full Senate vote and a House vote, leaving uncertainty in place. Disagreements among Democrats over amendments and the possibility of higher oil prices stemming from Middle East geopolitical risks are also seen as variables.

Crypto analyst Benjamin Cowen said Bitcoin has lagged gold, energy and stocks on a relative-return basis this year, indicating that the market's underlying strength has yet to recover. A short-term rebound remains possible, he said, but the pattern of heightened volatility that has appeared in U.S. midterm election years could reemerge. Altcoins in particular may prove more sensitive to fading expectations for easier policy and weaker appetite for risk assets.

Alex Kuptsikevich, chief analyst at FxPro, said the crypto market continues to underperform equities, leaving it vulnerable to renewed downside pressure if macro uncertainty persists. He added that open interest in crypto derivatives fell by about $1.25 billion as higher U.S. April producer prices weakened expectations for Federal Reserve rate cuts. Despite the recent rebound, trend-following inflows have yet to spread across the broader altcoin market, a sign that longer-term upside momentum remains limited.

Market participants are also watching flows into major assets for clues on whether the altcoin rally can continue. Altcoin Vector said spot Ether ETFs logged their strongest inflows of the year in April, but still showed net outflows of about 324,000 ETH for the year. If Ether fails to establish itself as the market's leading asset, altcoins may also struggle to turn the rebound into a structural recovery and could instead enter another stretch of higher volatility.

Kang Min-seung, Bluminbit reporter, minriver@bloominbit.io