NEAR, World and Stellar Surge, but Bargain Hunting in Altcoins Still Looks Risky

Altcoins are trading in a highly selective market within a broader downturn as Middle East tensions and uncertainty over US crypto regulation continue to weigh on sentiment. Analysts say investors should resist rushing into dip buying simply because prices have fallen sharply, and instead focus on tokens with confirmed trading volume and coin-specific catalysts.

More Than 260 of Top 300 Altcoins Fall, While Only a Few Mid-Caps Soar

Of the top 300 altcoins by market capitalization, only about 30 rose over the past week, while more than 260 fell. The figures underscore broad selling pressure across the market.

Still, some mid-cap tokens moved against the broader slump. BTW, a top-100 token by market value, surged 212%, while LAB jumped 142%. Humanity gained 110%, HOME climbed 93.6%, World rose 71.1%, MAGMA advanced 67.8%, BEAT added 63.3% and SIREN increased 60%.

Most major altcoins, however, posted steep losses. UB tumbled 43.7%, WAL dropped 37.3%, Helium fell 29.9%, Cardano lost 29.8% and Zcash slid 29.3%. IOTA, Chiliz, Sei and Bitcoin Cash also recorded declines in the 20% range. With Bitcoin weakening, sentiment toward altcoins is deteriorating, while only a small number of tokens are showing sharp moves on individual catalysts.

The market increasingly resembles a stock-picker's market, with performance diverging based on token-specific news and flows. Crypto research firm 10x Research wrote that some tokens, including NEAR Protocol, World and Stellar, rose 30% to 50% over the past week even as the broader market struggled. In the current environment, it said, choosing altcoins with clear individual catalysts matters more than betting on the market as a whole. CryptoQuant also said trading volume in altcoins excluding the top five tokens, including Bitcoin, Ether and Solana, has continued to rise despite weakening sentiment.

Only Some Altcoins Are Holding Up, Making a Selective Approach More Important Than Dip Buying

Recent trading in altcoins suggests short-term rotation into a limited number of names rather than a structural market recovery. Analysts advise investors to verify coin-specific developments and trading volume before taking positions instead of buying simply because prices look cheap.

Short-term volatility may also increase. Alex Kuptsikevich, chief market analyst at FxPro, said the total cryptocurrency market capitalization continued to decline and at one point fell to $2.17 trillion, with the pace of the broader selloff remaining relatively fast. Bitcoin also dropped to $61,300, retesting its 200-week simple moving average, a key long-term support level. In a thin-liquidity environment, that leaves room for further volatility. At the same time, he added that the market could pause its decline and catch its breath in the short term as it nears a strong support zone.

Oil prices and Treasury yields briefly fell after US President Donald Trump signaled restraint on further escalation, but the crypto market has yet to regain momentum. Institutional investors are watching for progress on the CLARITY Act, a US crypto market structure bill, and for a recovery in demand for spot exchange-traded funds. Some in the industry say final passage of the CLARITY Act could help draw institutional money into the sector. Others are more cautious, arguing that the time available for legislation is shrinking as the US midterm elections approach, limiting expectations for final passage this year.

Analysts also caution against assuming the market will avoid the weakness often seen in US midterm election years. Crypto analyst Benjamin Cowen said digital assets have repeatedly shown weakness in the first half of midterm election years in the US, and that the current pattern resembles the downtrends seen in 2014, 2018 and 2022. While Bitcoin dominance has recently wavered and some capital appears to be shifting into altcoins, he said that does not amount to the start of a sustained altcoin season. A broad recovery in altcoins will be difficult before Bitcoin confirms a strong rebound.

Analysts are also warning that premature dip buying in altcoins could be risky. Altcoin Vector said the market briefly revolved around Bitcoin in May, but some funds have recently shifted into large-cap altcoins as Bitcoin dominance weakened. It said that move looks less like confirmation of a structural rotation into altcoins than relative strength driven by Bitcoin's weakness. If Bitcoin's decline spreads, even the altcoins that have held up so far could face delayed corrections.

Kang Min-seung, Bloomingbit reporter minriver@bloomingbit.io