Bitcoin ETFs draw flows as altcoins face 5-year pressure

Altcoin sell pressure is extreme due to liquidity migration and net selling

Altcoin selling has reached a five-year extreme, with market structure pointing to persistent net distribution rather than a brief drawdown. The pattern aligns with a shift in liquidity toward the highest-cap, most institutionally accessible assets.

Based on data from IT Tech, the Cumulative Buy/Sell Difference across altcoins excluding Ethereum has turned roughly $209 billion negative over the past 13 months, signaling continuous net selling in spot markets. The metric aggregates taker-side spot flows to show whether buyers or sellers dominate over time; an extended negative print implies durable demand shortfalls.

This backdrop suggests a structural rotation rather than a cyclical pause. With liquidity clustering at the top of the market and fewer counterparties showing risk appetite, depth on non-Bitcoin pairs remains thin and price impact is elevated.

What it means: Bitcoin ETF inflows, liquidity drain, altcoin underperformance

According to Eric Balchunas, senior ETF analyst at Bloomberg, strong spot Bitcoin ETF inflows are capturing a meaningful share of crypto-directed capital that might otherwise rotate into higher-beta altcoins. Concentrated institutional demand for regulated Bitcoin exposure can mechanically compress risk premia across the long tail of tokens.

As reported by Cointelegraph, corporate digital asset treasuries have absorbed about $800 billion of retail capital that historically fueled altcoin speculation, reinforcing the liquidity drain thesis. This diversion helps explain weaker breadth, thinner order books, and the difficulty of sustaining altcoin rallies amid intermittent bounces.

Editorially, this liquidity-migration lens helps connect ETF-centric inflows with the prolonged negative spot flow signal in altcoins. “Liquidity, momentum, and conviction have all migrated elsewhere, leaving the altcoin market eerily quiet,” said 10x Research.

At the time of writing, Ethereum trades near $2,018.84 with 30-day volatility around 18.04%. It sits below its 50-day simple moving average of $2,731.34 and 200-day of $3,254.75, while the 14-day RSI is 35.51 and 13 of the past 30 sessions closed higher.

What to watch next and plausible market scenarios

Key indicators: BTC dominance, Bitcoin ETF inflows, CryptoQuant Cumulative Buy/Sell Difference

BTC dominance: A grind higher would be consistent with a defensive phase in which capital concentrates in Bitcoin and away from smaller tokens. A stall or reversal would be an early sign that market breadth might improve.

Bitcoin ETF net flows: Persistent positive prints alongside soft altcoin spot volumes would corroborate ongoing liquidity concentration. Moderating inflows or outflows could relax this pressure and allow relative performance to broaden.

Cumulative Buy/Sell Difference: Stabilization and a less-negative trajectory would indicate seller exhaustion in spot altcoins. Fresh lows or accelerating negatives would point to continued net distribution and fragile bounces.

Scenarios: seller exhaustion vs continued outflows amid 10x Research liquidity shift

Seller exhaustion: If BTC dominance plateaus, ETF inflows normalize, and the cumulative spot sell imbalance flattens, altcoins could see relief led by larger, liquid names with clearer regulatory footing. Any improvement would likely be gradual and data-dependent.

Continued outflows: If Bitcoin ETFs keep attracting disproportionate inflows and corporate treasuries retain capital once destined for altcoins, underperformance may persist. In that case, rallies risk fading quickly as liquidity remains concentrated and spot selling extends.