The bull market is "back," why haven't altcoins followed?

Preface

When BTC reached a historic high and ETH rose over 40% in a month, the crypto market reignited "bull market expectations." On-chain capital activity has rebounded, exchange activity has clearly increased, and macro signals are showing a favorable trend.

But when you open your wallet and find that altcoins are still stagnant— is this still the bull market you are familiar with?

1. Have Altcoins Really Missed the Bull Market?

As of May 22, 2025, the price of BTC has surpassed $110,000, setting a new historical high; ETH has risen over 45% in the past month. In this round of warming sentiment, capital and traffic have concentrated on mainstream assets. On the macro level, the easing of trade tensions between China and the U.S. and a rise in global risk appetite have provided a favorable upward channel for the entire crypto market.

However, against this backdrop of good news, the Altcoin sector remains overall sluggish. Most altcoins have not only failed to rise but have even continued to decline. The heat surrounding BTC and ETH masks a directional shift occurring in the entire market: altcoins are not without market activity; rather, they are being consciously "excluded" from capital and users.

Why does this bull market only belong to mainstream coins? Has the value logic of altcoins collapsed? Or do they need a new survival strategy? This article will dissect the challenges and paths faced by altcoins behind this structural bull market from several dimensions: macro environment, capital preferences, user mentality, and mechanism innovation.

2. Macro Environment Analysis: Has the Bull Market Really Arrived?

1. Easing Tariffs and Rising Risk Appetite

As of mid-May 2025, the main tone of the macro market has undergone a significant shift.

The China-U.S. tariff trade war has eased, with a joint statement issued after the Geneva economic talks stating that tariffs will be reduced from a peak of 125% to 10%. This move has not only sparked optimistic market sentiment but also released a positive signal against inflation.

As a result, the U.S. stock market has entered a structural upward channel. The S&P 500 index has risen from 4,800 points at the beginning of the year to 5,940 points (as of May 20, 2025), approaching a historical high. The risk appetite for capital has clearly increased, with the Nasdaq and large tech stocks rising, while gold and government bonds have shown signs of capital outflow.

At the same time, the crypto market has also benefited significantly. According to data from CryptoQuant and CMC, since March, the net inflow of capital into crypto assets dominated by BTC has reached $9.3 billion, with most of it concentrated in the spot market, especially during Eastern U.S. trading hours, indicating a significant influx of U.S. capital.

2. Mainstream Coins Continue to Rise

BTC broke through $110,707 during trading on May 22, 2025, soaring to a historic high; ETH has shown strong growth since April, rising to around $2,629 by May 22, entering the "critical zone" for breaking through $3,000.

3. Are Mainstream Coins Becoming a "Safe Haven" for Capital? This Reflects a "Preference for Certainty"

• Regulatory expectations are clearer: BTC and ETH have strong compliance attributes, and the classification by the U.S. CFTC and SEC is gradually becoming clearer;

• Better liquidity: Large institutions (such as BlackRock and Fidelity) continue to absorb BTC through spot products or custody services;

• More complete narratives: BTCFi and the Ethereum L2 ecosystem have recently become the center of a new round of discussions.

This has allowed mainstream coins to gain excess premiums in the new round of market activity, while altcoins have fallen into the margins of capital.

4. Overall Performance of Altcoins is Flat

In contrast, the performance of the Altcoin sector is significantly weaker.

The following shows the price performance of BTC, ETH, and representative altcoins over the past month (data source: CoinMarketCap, TokenizeXchange):

It can be seen that, except for a few narrative hot projects like AVAX and NEAR that have seen slight increases, most altcoins have not rebounded along with mainstream coins and have even experienced declines, with capital further concentrating on mainstream coins.

5. Is the Market Not "Out of Money," but "Unwilling to Take Risks"?

Data from Dune's on-chain interactions shows that the entire market is not lacking liquidity, but liquidity is extremely skewed. Buying is concentrated in BTC and a few high-heat projects, while the trading depth of altcoins continues to decline. Google search volume for BTC and ETFs has surged.

The bull market has indeed returned, but it seems to belong only to Bitcoin, not to altcoins.

3. Why Haven't Altcoins Kept Up?

1. User Mentality Matures: The Cycle of FOMO Has Passed

During the bull market of 2021, many retail investors entered the market due to FOMO, blindly chasing various new coin projects, and ultimately most were deeply trapped during the periodic crashes of altcoins. According to data analysis agency Messari, by the end of 2022, over 73% of non-mainstream token investors were in a state of loss after holding for six months.

After market rotations, by 2025, investors have generally formed a more cautious trading mentality:

• They pay more attention to the real user numbers and on-chain activity of projects;

• They are more inclined to choose projects with mechanism innovation, clear airdrop mechanisms, and ecosystem support;

• They no longer easily "follow tips" or blindly invest all in.

Data from Dune's on-chain interactions shows that the median participation volume (7-day active addresses) for altcoin projects after launch has dropped from over 13,000 in 2021 to currently less than 2,800, with community enthusiasm visibly cooling.

Users are not avoiding the market; they are choosing to "wait smartly."

2. KOL Behavior Transformation: From "Shouting Bull" to "Arbitrage"

In the past, altcoin projects heavily relied on KOLs and community dissemination. KOLs converted traffic into price through early accumulation, live tip broadcasts, and video content. However, in 2025, with various sectors, meme coins booming, and project airdrop strategies changing, KOLs have increasingly transformed from "content distributors" to "market manipulators."

By observing KOLs active on X, it is not difficult to find that: KOLs have a pre-allocated proportion of tokens before promoting projects; after community announcements, they gradually sell off on exchanges/DEXs for profit; and there are clear records of "pump & dump" behavior.

Especially in some recent "hot projects" within the Solana ecosystem, KOLs frequently participate in "airdrop farming + group pulling to divert attention" strategies, increasing the probability of losses for ordinary users.

In the long run, this behavior is accelerating the destruction of trust in altcoins.

3. Sector Heat Shift: Narratives Can't Compete with BTCFi, AI, and Restaking

CoinGecko reports that the current crypto narratives are concentrated in the following three sectors:

Traditional altcoin projects lack connections to mainstream narratives, with thin narratives, no technological breakthroughs, and scarce ecosystem collaborations, making it difficult to attract new traffic attention.

The hot topic is no longer "all coins can rise," but rather capital and users concentrating on "investing in the right story."

4. Market Trust and Liquidity Structure Are Being Rewritten

The trust mechanism of altcoins is collapsing:

• Users no longer trust project teams: most projects are only active in the first 30 days after launch, after which liquidity dries up.

• Market makers' interest is declining: MM strategy institutions are concentrating resources on BTC, ETH, and compliant stablecoins, with altcoin trading pairs being delisted by multiple exchanges.

A more serious issue is the lack of consensus leading to community "hollowing": project teams are left with only operational accounts and no real community; retail investors are flowing into points systems, airdrop hunter channels, and even AI mining.

This has also led to a new phenomenon—altcoins are no longer about "foolish speculation," but rather "quick speculation": no one believes in long-term, everyone is scrambling for short-term liquidity.

The lack of rise in altcoins is not because no one is paying attention to them, but because there is no longer a reason to believe in them.

When the incentive design of project teams is no longer sustainable, KOLs' credibility cannot be established, and users' game only remains "running away," the entire altcoin ecosystem loses its basic trust and liquidity support structure.

The next step is to redesign this system, rather than repeating old routines.

4. The Rise of New "Altcoin Play"

1. Exchange-Driven Airdrop and Points Mechanisms

In the context of declining user enthusiasm, some exchanges have emerged to stimulate user participation through task systems, points redemption, and airdrop activities. Additionally, some projects have begun to introduce point multiplier mechanisms to incentivize users' long-term participation and enhance community activity. The core of these mechanisms lies in:

• Lowering participation thresholds: rewards can be obtained through simple tasks, attracting more users to participate.

• Enhancing user stickiness: points and airdrop mechanisms encourage users to continuously engage in the project ecosystem.

• Expanding community influence: referral mechanisms prompt users to actively spread the project, increasing its impact.

2. Launching at Peak? The Sustainability of Meme Coins is Questioned

Meme coins in 2025 exhibit stronger community-driven characteristics. Project teams quickly gather popularity through social media, community activities, and viral content dissemination. Before launching on exchanges, they typically attract market attention rapidly through social media; after the coin pair goes live, prices soar quickly, followed by a rapid decline. Their sustainability is questioned, and the market is calling for project teams to continuously optimize aspects such as security, governance structure, and community building.

5. Future Outlook: The Path for Altcoins to Break Through

1. Do Altcoins Need a Facelift vs. a Soul Change: Repackaging Old Projects or Reconstructing Mechanisms?

Whether altcoins still have opportunities does not depend on market conditions but on whether they can "self-renew."

Many projects have gone silent during bear markets, only to "revive" at the beginning of bull markets: changing a logo, updating a roadmap, adding some AI keywords, and starting to tell stories again. But users in 2025 are no longer easily deceived by "old wine in new bottles."

Compared to "facelifting," truly competitive projects have chosen "soul-changing": reconstructing token economic models, introducing fairer airdrop mechanisms, and even guiding community co-governance through DAOs, transforming users from speculators into ecosystem builders, while relying on an extremely simple user experience and deeply binding on-chain native traffic to achieve sustained activity and liquidity.

The key to breaking through is not how trendy the packaging is, but how new the mechanisms are, how genuine the emotions are, and how steady the rhythm is.

2. What Do Retail Investors Really Need? Narrative? Practicality? Or Pure Speculation?
Retail investors in 2021 chased narratives and imagined possibilities.
Retail investors in 2025 are more concerned with "Can I try and fail at a low cost?", "Can I sell at any time?", "Am I being treated as a counterparty by the project team or KOLs?"

They do not need "grand visions"; what they need is clear expectation management and quick feedback.

This also means that project teams must redesign user participation paths:

• Mechanisms tied to tasks, points, and NFTs cannot just play "incentives," but must incorporate "exit costs" into the design;

• No longer pursuing explosive user numbers, but establishing a small yet elite "core loyalty pool";

• Making users feel that they are not "being designed," but "participating."

3. How Can Project Teams, Platforms, and Communities Rebuild User Trust?

Currently, the market has two growth engines:

• Exchange/platform-driven traffic systems: exchanges are reconstructing a user acquisition path of "tasks → incentives → airdrops → listings." This is not only a tool for cold-starting projects but also a "sandbox" for controlling traffic risks.

• Community-driven new narrative systems: Telegram fission, creator DAOs, and low-threshold KOL incubation tools (like Zealy, Galxe) have become the infrastructure for the autonomy of altcoin traffic.

If the previous traffic strategy was "overwhelming," the current strategy is more like "igniting sparks": allowing early believers to engage, earn money, and generate real transactions and content is the only way to achieve fission and natural dissemination.

Conclusion: Altcoins Have Reached a Point of Reshuffling

Altcoins have not disappeared; they have simply reached a point of reshuffling.

Projects that lack mechanism innovation, community participation, and fantasize about rising tenfold through mere hype are destined to sink in this cycle.
However, projects that truly understand changes in user behavior, reconstruct incentive structures, and can coexist and win with the community still have the potential to break through in a "localized bull market."

This bull market does not belong to all altcoins, but to those players who are serious about their work.
It is not about "who shouts the loudest wins," but "who can stabilize people's hearts will survive longer."