Altcoin Rally Hits Supply Problem as Exchange Deposits Surge

The recent altcoin rally is showing signs of slowing down, as exchange deposits involving altcoins have surged by 160% in just two weeks. According to CryptoQuant data, the seven-day number of altcoin deposits reached approximately 78,000 transactions on September 28, compared to 29,800 on September 14, marking the highest reading since October 2025.

The increase in deposits is broad, rather than being caused by a few large wallets, as depositing addresses nearly tripled from 17,600 to approximately 51,600. This raises concerns that holders may be locking in profits after September's strong performance.

Some of September's strongest performers, such as Near Protocol ($NEAR), Stellar ($XLM), and XRP, are showing signs of weakness. Despite their strong weekly performances, $NEAR and $XLM are down approximately 2.9% and 1.5% over the latest 24-hour period, respectively, while $XRP has fallen around 1.2%.

The broader environment also warrants caution, as CryptoQuant data indicates that Bitcoin spot demand contracted by roughly 170,000 BTC over 30 days, while growth in speculative futures demand dropped about 90% between September 14 and September 29. Recent Bitcoin buyers were also sitting on average unrealized profits of roughly 33%.