Altcoins Underperform as Bitcoin Holds Support in Current Bull Cycle

CryptoQuant analyst Crypto Dan has released a new report detailing the distinctive characteristics of the current 2024–2025 cryptocurrency bull market cycle and how it diverges from previous bull runs. According to his analysis, large market participants appear to be deliberately moderating price surges to extend the overall duration of the rally. This behavior, which he refers to as “artificial market suppression,” contrasts sharply with the more organic, market-driven corrections observed during the 2017 and 2021 bull cycles.

Crypto Dan’s report notes that, in early 2024, major cryptocurrencies experienced a rapid ascent. Bitcoin rose from just under $40,000 in late February 2024 to a peak above $80,000 by mid-November 2024. Ethereum climbed from around $2,300 in February 2024 to nearly $4,800 over the same period. During this span, many smaller altcoins posted gains of 200% or more. However, unlike past cycles—where price corrections were relatively drawn out—these rallies were followed almost immediately by abrupt pullbacks.

Between mid-November 2024 and late November 2024, Bitcoin’s price fell by roughly 30%. Altcoins declined even more sharply, with many tokens losing between 40% and 60% of their value. Instead of allowing a multi-month consolidation phase to unfold, large stakeholders appear to have executed rapid sell-offs at the first sign of overheating, then reaccumulated positions at lower price levels. According to Crypto Dan, this pattern has repeated twice so far in the current cycle: first between March and November 2024, and again between January and April 2025.

Comparison with 2017 and 2021 Cycles

In the 2017 bull market, Bitcoin’s price peaked near $20,000 in December 2017 before entering a drawn-out correction that lasted approximately eight months. Altcoins that had briefly surged into the hundreds of dollars per token collapsed by over 90% during that adjustment. Market participants at that time were largely retail investors reacting to rapidly rising prices and widespread media attention. Corrections during that cycle were driven by profit-taking, regulatory uncertainty, and a general shift in sentiment rather than by coordinated interventions.

During the 2021 bull cycle, prices escalated sharply in late 2020 and early 2021, with Bitcoin reaching roughly $64,000 in April 2021. However, the onset of the COVID-19 Delta wave, combined with regulatory actions in China and concerns over U.S. tax guidance, triggered a prolonged adjustment that stretched into early 2022. Bitcoin’s price fell by more than 50% over the course of nearly twelve months, and altcoins experienced similar or greater declines. That downturn was gradual and largely reactive to evolving external conditions.

By contrast, the 2024–2025 cycle has lacked any lengthy, market-driven correction. After each surge in price, large holders have intervened almost immediately, pushing prices back down through targeted sell orders. These rapid pullbacks have typically lasted just a few weeks before buying pressure reemerged. As a result, the overall bull trend has continued uninterrupted, despite multiple short-lived downturns.

Evidence of Strategic Market Moderation

Crypto Dan points to several on-chain metrics as evidence of this “artificial suppression.” First, realized profit and loss data for Bitcoin during the November 2024 pullback showed a spike in short-term holders booking profits. In earlier cycles, such a spike would have signaled the beginning of a multi-month downturn. Instead, institutional and high-net-worth buyers swooped in, absorbing sell-side liquidity and holding price levels from falling further.

Second, exchange net flows—measuring coins moving in and out of exchanges—appear to show patterns of accumulation following each correction. When Bitcoin dipped below $65,000 in late November 2024, large inflows to exchange cold wallets were quickly offset by outflows to private, institutional wallets. This suggests that deep-pocketed participants were preparing to take on new positions rather than exiting the market.

Third, derivatives markets have behaved differently in 2024 and 2025. Funding rates on perpetual futures contracts, which typically turn negative when too many traders hold long positions, dipped briefly during corrections but rebounded within days. At no point did funding rates plunge to levels historically associated with liquidation cascades. In the January–April 2025 pullback, Bitcoin’s funding rate bottomed near –0.02% per eight hours, whereas in 2017 and 2021 similar downturns saw rates fall below –0.10% per eight hours. According to Crypto Dan, this muted response in funding indicates that leveraged longs were protected from large-scale liquidations by coordinated buying.

Altcoin Underperformance and Market Sentiment

During both major correction phases—March through November 2024 and January through April 2025—altcoins consistently underperformed Bitcoin. While Bitcoin’s declines were in the 30% to 35% range, many altcoin tokens fell 50% or more. This disparity weighed heavily on overall market sentiment, as altcoins tend to reflect retail and speculative interests. Yet, Bitcoin’s relative stability prevented a widespread panic among institutional holders, whose positions often prioritize Bitcoin over smaller tokens.

Surveys of social media sentiment and crypto-focused chat rooms showed a spike in negative sentiment during the height of each pullback. However, these periods of pessimism were short-lived. Within two to three weeks of the trough in altcoin prices, sentiment indicators returned to levels consistent with moderate bullishness, suggesting that retail traders were quick to view each drop as a buying opportunity. Behind the scenes, Crypto Dan’s analysis indicates, major participants were orchestrating the recovery by placing large buy orders at key support levels.

Anticipated Bubble-Like Climax

Based on historical patterns and current on-chain data, Crypto Dan forecasts that this bull cycle will conclude with a pronounced bubble-like phase marked by extreme speculation and elevated valuations across the board. He points out that certain metrics—such as the percentage of Bitcoin held for less than one month—have already reached levels seen near prior cycle peaks. In Q4 2024, approximately 36% of Bitcoin in circulation had been moved within the past 30 days, a classic sign of speculative fervor.

Derivatives open interest has climbed to record highs as well. In March 2025, open interest on Bitcoin futures contracts surpassed $40 billion, exceeding the peaks recorded in 2021. Funding rates briefly turned negative in early March 2025, but unlike previous cycles, large-scale liquidations were avoided. As a result, leverage has continued to build in the system. Crypto Dan cautions that if Bitcoin’s price were to drop below $60,000, liquidation risk could become acute enough to trigger a rapid, disorderly decline.

He also notes that some altcoins are already trading at unprecedented valuations relative to their earlier cycle highs. Tokens with smaller market capitalizations have seen price multiples north of 10× their late-2021 peaks. This concentration of speculative capital in high-leverage, low-liquidity markets could amplify volatility in the final leg of the current bull run.

Institutional Influence and Market Dynamics

One of the most significant differences in the 2024–2025 cycle is the level of institutional involvement. Whereas the 2017 bull primarily involved retail participants and the 2021 cycle saw the early entrance of some funds, today’s market includes hedge funds, corporate treasuries, and sophisticated algorithmic trading desks. According to Crypto Dan, these actors possess both the capital and the technical sophistication to execute rapid-fire buying and selling around any price spike.

Such coordinated actions have effectively flattened what would otherwise have been longer corrections. Major crypto-focused funds are reported to have internal risk committees that enforce maximum drawdown limits. Once those limits are reached, trading desks are authorized to deploy capital to support prices. Meanwhile, on-chain data indicate that several multi-billion-dollar funds have been accumulating Bitcoin and select large-cap altcoins on each dip. By doing so, they have maintained a floor under prices and prevented a pronounced sell-off.

Implications for Retail Investors

For retail participants, the current environment carries both opportunity and risk. The repeated rapid pullbacks have offered a series of low-entry points, and many retail traders have taken advantage of these dips to establish or increase positions. Because corrections have been short, retail sentiment has remained relatively bullish. Several retail-oriented exchanges have reported inflows of new user deposits following each pullback, suggesting that newcomers view each downturn as a buying opportunity rather than a warning sign.

However, the prospect of a bubble-like climax raises concerns. In past cycles—particularly in late 2017 and early 2018—retail investors who entered near the peak suffered significant losses during the ensuing bear market. In the current cycle, with institutional players holding large positions and employing strategies to manage downward pressure, there may be an extended period of price stability that masks underlying risk. When the final euphoria sets in, valuations could overshoot rational levels by a wider margin than before, creating an even steeper drawdown when the bubble inevitably bursts.

Expected Timeline and Key Indicators

Crypto Dan’s report suggests that the bull cycle, which began in earnest in January 2023, will likely reach its climax between late Q2 2025 and Q3 2025. He points to several indicators that will merit close attention in the coming weeks and months:

• Percentage of short-term Bitcoin holdings: Historically, a sustained reading above 30% has signaled a market top. This metric surpassed 36% at the end of 2024 and has hovered near that level through early June 2025.
• Derivatives open interest: As of early June 2025, open interest on Bitcoin futures remains above $35 billion. A rapid escalation toward or beyond $45 billion could indicate an imminent surge in speculative leverage.
• Stablecoin reserves on exchanges: When stablecoin balances on major exchanges exceed a certain threshold—roughly $150 billion across all major platforms—it suggests that significant buying power is poised on the sidelines. As of May 2025, stablecoin reserves were near $140 billion, within striking distance of this historical benchmark.
• Funding rate extremes: Should funding rates for perpetual contracts move decisively above 0.05% per eight hours, it would signal that long positions are becoming overcrowded and set the stage for potential liquidations.

Crypto Dan’s data show that, during the most recent period (May 2025), funding rates have averaged around 0.03% per eight hours—modestly elevated but not yet at peak levels. If these rates climb further, it may indicate that retail and institutional participants alike are piling into leveraged positions at an unsustainable pace.