Altcoin Season Fades as Market Liquidity Flows Into Bitcoin
Capital is rotating aggressively back into Bitcoin as altcoin trading activity contracts sharply, signaling a defensive shift across the crypto market.
After a steep correction, Bitcoin is consolidating between $72,000 and $65,000, a range that has become a battleground for whales, long-term holders, and institutional investors. Trading activity within this zone suggests large players are actively accumulating while broader market sentiment remains cautious.
Binance Data Shows Clear Rotation
A breakdown of trading volumes on Binance highlights a decisive redistribution of liquidity.
As Bitcoin moved back above $60,000, its share of total exchange volume surged. On February 7, BTC accounted for 36.8% of total Binance trading volume, reclaiming dominance and maintaining that lead through mid-February.
In comparison:
- Altcoins represented 35.3% of exchange activity.
- Ethereum accounted for 27.8%.
The contraction in altcoin participation has been severe. In November, altcoins made up 59.2% of Binance trading volume. By February 13, that figure had dropped to 33.6% – an almost 50% decline in activity.
This pattern mirrors previous corrective phases seen in April 2025, August 2024, and October 2022 near the end of the prior bear cycle.
Bitcoin Dominance Near 60%
Broader market metrics reinforce the shift. Bitcoin’s market dominance has stabilized between 58% and 60% as of February 17, reflecting what analysts describe as a “flight to liquidity.” The Altcoin Season Index has retreated to around 41, signaling that the late-2025 altcoin momentum has faded.
While overall altcoin volumes have shrunk, capital has not fully exited the ecosystem. Instead, flows have become more selective, with institutional interest concentrated in higher-liquidity assets such as Ethereum, Solana, and Chainlink.
Whale Accumulation Builds Support
On-chain data shows that wallets holding between 1,000 and 10,000 BTC have added more than 100,000 BTC since the start of 2026. This accumulation has contributed to a perceived price floor in the $60,000 to $70,000 range.
At the same time, recent spot Bitcoin ETF outflows – estimated at roughly 18,000 BTC in mid-February – have added short-term pressure, reinforcing the current consolidation phase.
Bitcoin is now trading near $68,000, with strong support at $65,000 and resistance at $72,000. Meanwhile, Ethereum has lagged, with the ETH/BTC ratio hitting recent lows as ETH trades between $1,950 and $2,250.
Macro Uncertainty Drives Defensive Positioning
Rising macro uncertainty, including questions surrounding the Federal Reserve leadership transition and the nomination of Kevin Walsh, has increased risk aversion across markets.
Historically, during periods of stress, capital consolidates around Bitcoin before dispersing into higher-beta assets. The current environment appears to follow that same blueprint.
As volatility persists, trading behavior suggests investors are prioritizing liquidity and capital preservation – reinforcing Bitcoin’s role as the market’s central benchmark asset.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
