Are altcoins trapped in an independent bear market? With a 56% market share, Bitcoin's "vampire effect" and market structure shift

According to Gate Market Data, Bitcoin’s price reached $70,500.6 on February 9, 2026, down approximately 50% from the all-time high in October 2025. However, its market dominance (BTC.D) remains firmly in the 56-57% range.

During the same period, the total market cap of altcoins (TOTAL2), excluding Bitcoin, fell 51% from its peak. According to Gate’s data, the prices of Ethereum (ETH) and Solana (SOL) are $2,075.78 and $85.99, respectively, having declined 32.22% and 35.92% over the past 30 days.

The Altcoin Season Index reading is approximately 37 (out of 100), well below the 75 threshold that signals the start of an “Altcoin Season.” This indicates that market funds are still firmly rooted in Bitcoin.

Market Status: The Harsh Reality of Capital Withdrawal

The current crypto market presents a fragmented picture. On one hand, Bitcoin, with its “digital gold” narrative and large institutional capital pool, shows strong resilience; on the other hand, most altcoins have experienced severe declines.

As of early February 2026, the total cryptocurrency market cap briefly dropped to $2.295 trillion, with a 24-hour decline of over 10%. The panic sentiment in the market is evident. This decline is not evenly distributed. Bitcoin’s dominance has actually increased during recent market volatility, maintaining a high level of 56-57%. This clearly indicates that during risk-averse periods, funds are withdrawing from high-risk altcoins and possibly flowing back into Bitcoin, which is viewed as relatively safer.

Exchange Rate Performance: Decoupling Analysis Between Mainstream Altcoins and BTC

The widely observed “decoupling” phenomenon essentially measures whether altcoins are strengthening or weakening relative to Bitcoin. We compared the exchange rates of several major altcoins against Bitcoin (such as ETH/BTC, SOL/BTC).

Recent data shows that most mainstream altcoins continue to decline against Bitcoin. Glassnode’s analysis indicates that over the past three months, nearly all crypto sectors have underperformed Bitcoin, signaling a “capital flow concentration into Bitcoin” market environment.

Capital is shifting from purely speculative tokens (like certain meme coins) toward assets with clearer use cases. For example, payment-oriented altcoins have shown relatively stronger stability during this downturn, with shallower declines.

Key Indicators: Insights into Market Structure and Sentiment

To judge whether the market is on the verge of an “Altcoin Season,” several key indicators can be observed. First is Bitcoin dominance (BTC Dominance). Currently, this metric is high, directly squeezing the overall performance space for altcoins.

Another important indicator is the Altcoin Season Index. This index scores the performance of the top 100 altcoins over the past 90 days compared to Bitcoin. Currently, the index reading is only 37, far below the threshold for “Altcoin Season.”

Additionally, market breadth indicators show that only a very small proportion (e.g., 8%) of altcoins are trading above their 50-day moving averages, reflecting the overall weakness of the altcoin market.

Technical Analysis: Key Levels and Potential Reversal Signals

From a technical analysis perspective, the market is at a sensitive juncture. The Bitcoin dominance (BTC.D) chart shows some potential reversal patterns.

On the BTC.D chart, a triple bearish pattern has formed, which may indicate a weakening of its dominance in the future, creating a rebound opportunity for altcoins.

However, any potential rebound requires volume confirmation. Currently, overall trading volume is weak, and investor interest is low, which could cause any upward attempts to fail quickly. Mainstream altcoins are also facing critical support levels. For example, Ethereum needs to hold the $2,623 support; if broken, it could further decline. Solana’s key support is around $95.

On-Chain Fundamentals: Developer Activity and Network Health

In the context of a broad market decline, on-chain fundamentals of projects become an important measure to distinguish “value projects” from “air projects.” Ongoing developer activity, active addresses, and stable network usage reflect a project’s long-term vitality.

Recent market trends suggest that funds may be flowing out of speculative tokens lacking real use cases and development support, into projects with ongoing development progress and clear roadmaps. For example, despite the price declines, the ecosystems of mainstream blockchains like Ethereum and Solana continue active development. The long-term value of these networks ultimately depends on whether the applications built on them can attract real users and generate value.

Macro Environment: How Liquidity Anchors Affect Altcoins

Historical cycles show that the collective surge of altcoins is closely related to the global macro liquidity environment. They tend to perform best in high-liquidity, low-interest-rate, accommodative monetary conditions.

Since 2022, tightening monetary policies by major global central banks have constrained market liquidity, greatly suppressing the performance of high-risk assets like altcoins. Looking ahead to the second half of 2026, markets are watching whether central banks will shift their policies. If major central banks, as expected, begin to cut interest rates and adopt more easing stances, the momentum for high-risk assets could reignite. This would be an important macro signal for a potential turnaround in the altcoin market.

Outlook for 2026: Divergent Views and Possible Paths

There is significant disagreement among analysts regarding the direction of the altcoin market in 2026. One relatively optimistic view suggests that the current difficulties in altcoins may be laying the groundwork for a long-term bottom, with larger capital rotations possibly forming in 2026.

A more cautious or even pessimistic view argues that the traditional “rising tide lifts all boats” altcoin season may not recur. Future market liquidity will become “extremely selective,” flowing only into blue-chip projects with real applications and strong fundamentals.

Asset management firm Bitwise predicts that 2026 could be a breakout year for the crypto market, with Bitcoin, Ethereum, and Solana potentially reaching new all-time highs. However, this would be driven more by institutional adoption, ETF capital flows, and new dynamics rather than the old cycle patterns.

Structural Changes in the Market

Regardless of the view, a consensus is that market structure has changed. Institutional tools like spot Bitcoin ETFs have altered the way funds enter and prefer the market.

Institutional investors tend to favor Bitcoin due to its clearer regulation, market depth, and relative (within crypto) stability, which has solidified or even increased Bitcoin’s dominance.

In the future, narratives like tokenized real-world assets (RWA) may become key drivers attracting new capital into crypto, but this may not benefit all existing altcoins.

Bitcoin’s dominance chart shows a potential head-and-shoulders pattern forming, with the neckline becoming a battleground for bulls and bears. Meanwhile, the total market cap of altcoins is consolidating near a key support level, forming a “triangle convergence” pattern common in technical analysis. An anonymous veteran trader commented on social media: “The market is swinging between two futures: one where Bitcoin continues to bleed out, and another where funds flood into altcoins like a dam breaking. The key to the direction lies half in the hands of the Federal Reserve, and half in the hands of those developers still quietly building.”