Altcoin inflow to the exchange surged to an 8-month high — Sell-off signal?

The latest data from CryptoQuant shows that the inflow of altcoins to Binance — the largest exchange in the world by trading volume — has reached its highest level in months.

Amidst the strong increase in trading activity, the altcoin season index remains at only 35. However, analysts believe that the altcoin season may be about to begin.

Altcoin skyrockets on Binance: What does it mean?

Maartunn, the community analyst of CryptoQuant, recently highlighted this change in a post. He stated that the volume of altcoin sent to the exchange has remained stable over the past few months, with very little fluctuation. This occurs during a period when the price of Bitcoin is consolidating.

However, he noticed that the sending volume has increased significantly recently, with the number of transactions in the last 7 days exceeding 45,000 — the highest level since the end of 2024.

“This increase may indicate that many traders are preparing to act,” Maartunn commented.

He also mentioned that altcoin activity has increased following the recent price surge of Bitcoin, surpassing the $112,000 mark. According to him, this price volatility has attracted more attention to altcoin. However, it is important to note that inflows to the exchange are often a sign of selling pressure rather than buying demand.

“When the deposit volume increases like this, it usually means that users are transferring money to the exchange for trading rather than holding. Whether this leads to additional purchases of ( in the case of depositing USDT/USDC) or selling ( to convert altcoin to stablecoin) depends on the next market developments, but it is clear that the activity is increasing.”

The altcoin influx into Binance | Source: CryptoQuantMoreover, data from CryptoQuant also shows that the number of addresses and the total number of transactions related to the altcoin influx into the exchange have increased significantly. Thus, the trading activity in the altcoin market is at a higher level.

However, despite the increased activity, the altcoin season index has not yet confirmed the official return of the altcoin season. This index tracks the performance of 50 crypto coins excluding stablecoins and wrapped tokens compared to Bitcoin over a 90-day period and only identifies an “altcoin season” when 75% of those coins outperform Bitcoin.

Current figures have not yet reached this threshold, indicating that Bitcoin still dominates market sentiment.

!()https://img-cdn.gateio.im/webp-social/moments-4fcef92b158d7f53010c625f6420c5fe.webp[Altcoin]Altcoin season index | Source: BlockchainCenterFurthermore, a trader and analyst suggest that the altcoin season has ended due to an oversupply of altcoins, insufficient liquidity, and the attention of retail investors being dispersed.

“The altcoin season is dead and it will not come back. The previous altcoin season was when 50 projects increased 20–100 times. Now there are only 5 ‘cult’ coins rising sharply, while the remaining 5,000 coins are silently plummeting,” he commented.

According to you, instead of a widespread growth of altcoins, it is currently a “story season”, where only the most compelling projects can break through.

However, some other analysts remain optimistic that the altcoin season is approaching.

“The altcoin season is building strength. We have returned to the area that previously created 5x–20x surges in 2019 and 2020. The dominance rate of BTC is peaking. Altcoins are coiling up before a strong breakout. When this spring releases… the game begins,” wrote Merlijn The Trader.

Another analyst pointed out that although it is not yet altcoin season, the necessary conditions are gradually forming. She believes that September may be a key time for a breakout.

“Altcoin momentum: Slowly building on ETH, meme tokens, and DeFi. The accumulation phase may have begun, in line with the classic pattern of August,” Lucie commented.

The altcoin market reflects the performance of small-cap stocks in the US — both are considered high-risk, high-reward investments. With small businesses becoming increasingly optimistic, the potential for growth remains, indicating that altcoins still have room to expand.

Minh Anh