Altcoin Rally Hits Critical Phase as Exchange Deposits Soar
The altcoin market is showing signs of overheating as exchange deposits rise and more than 87% of Binance-listed altcoins trade above their 200-day moving averages.
CryptoQuant analyst Darkfost warns that the current rally may be entering a critical phase, citing the rapid influx of funds into the 'Total2' metric, which excludes Bitcoin. Since June, over $371 billion has flowed into Total2, a 45% increase in just a few months.
The shift to gains is broad, with Darkfost noting that as recently as August, 80% of Binance-listed altcoins were below their 200-day moving averages. However, this share has since fallen to 13%, indicating that 87% have regained the long-term trend line.
The analyst views this change as a sign of euphoria spreading across the altcoin market, but warns that such moves have not lasted long and eventually lose momentum. Technical indicators also show signs of slowing gains, with Total2's relative strength index (RSI) showing a bearish divergence.