'Liquidity Is Disappearing': Bitcoin's Downturn Spells Doom For Altcoins, Analyst Warns

While some traders remain hopeful for an altcoin rally, crypto chart analyst Ali Martinez warns that current market conditions don't favor it.

What Happened: In a detailed post on X on Feb. 22, Martinez laid out a harsh reality—altcoin season isn’t taking off.

That is not due to lack of potential, but because the conditions no longer align. Over 36 million tokens in existence have means the market is oversaturated, while liquidity is drying up.

Between January and April 2024 alone, over $25 billion worth of new tokens were unlocked, flooding the market with excess supply.

Capital inflows have plunged by 70% since December, leaving the market vulnerable to manipulation.

Even major bullish catalysts—such as Trump's pro-crypto stance, ETF discussions for Solana SOL/USD, Dogecoin DOGE/USD, and XRP XRP/USD, and sovereign wealth funds accumulating Bitcoin BTC/USD—haven't been able to boost prices.

Lawsuits against Coinbase, Kraken, and Uniswap being dismissed added to optimism but failed to trigger significant rallies.

At the same time, negative news like the $1.46 billion Ethereum ETH/USD hack, meme coin scams and Solana's upcoming $2 billion token unlocks have weighed heavily on sentiment—reminiscent of late-stage bull markets in 2021.

Also Read: Altcoins Face ‘Insane Volatility’ And ‘Super Negative’ Sentiment—But ‘Better Days Are Coming,’ Says Trader

What's Next: Martinez believes the current market calls for precision trading—waiting for ideal setups, avoiding emotional decisions, and only executing high-probability trades.

He warns that 2025 is about taking profits, not investing, revealing that he has already sold 80% of his Bitcoin.

"Liquidity is disappearing, sentiment is shifting, and the easy money has already been made," Martinez stated. While he sees risks outweighing rewards for holding Bitcoin, he doesn't completely rule out the possibility of a market rally.

Read Next:

• ‘Alt Season Has Begun,’ Expert Says, But Will Ethereum, XRP, Solana Benefit?

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