- Lower-capped tokens are gaining ground and surpassing higher market share groups.
- Donald Trump’s recent actions led to heightened market activity.
- Increasing divergence between Bitcoin and altcoins could signal potential danger.
A new trend is developing in the altcoin market, with lower-capped tokens gaining ground and surpassing higher market share groups in liquidity share.
Kaiko Research’s latest report highlights this new trend, noting its unique timing alongside increasing market activity triggered by prevailing socio-economic events.
Trump Effect on Crypto Markets?
Donald Trump’s emergence as the new US president triggered a ripple effect that transverses the mainstream and digital assets sector.
From the election result declaration last November to Trump’s January 20 inauguration, including the policies somersault that described the initial few days of the Trump administration, the digital assets sector saw heightened market activity.
Smaller Altcoins – Suddenly “In Demand” for Liquidity
According to Kaiko’s report, the daily liquidity of altcoins has almost doubled since September 2024, hitting $960 million.
Related: Top 30 Tokens by Volume and Depth: Kaiko Research Data
The top 10 altcoins by market capitalization accounted for 64% of the total market depth, leaving the mid-cap tokens with a declining market liquidity share. Meanwhile, smaller digital assets within the top 50 altcoins region have been quietly gaining ground, surpassing higher market cap groups in liquidity share.
Market Pullback Hit Altcoins Hard
The altcoin market did take a hit after the new president’s policy announcements just days after taking office. Although the decline cut across the entire crypto market, Bitcoin showed notable resilience. Bottomline is, the divergence between Bitcoin and altcoins’ fortunes over the past few weeks.
A lot of experts are calling this growing split a red flag for altcoins, warning it could mess with their projects’ long-term survival. The trend shows the dynamic nature of the crypto market, where investors and traders would have to stay focused and adapt to the brisk shifts.
Related: Bitcoin’s 30-Day Volatility Surpasses Ether’s Volatility Rate: Kaiko
Although the current trend appears not to favor the top altcoins, investors are on the lookout, mainly because the socio-economic landscape in the US is under reconstruction.
Many people believe President Trump’s upcoming decisions will play a role in reshaping the digital assets industry. Hence, the observed relative absence of liquidity in the market as traders and investors await the next move.
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