Ever since Bitcoin plunged below $90,000, it has been struggling to reclaim those levels. Moreover, this price action has kept the Ethereum price restricted below $3000, BNB below $900, XRP below $1.9, Cardano around $0.35, and Dogecoin around $0.122. In the meantime, some of the altcoins have been showing massive strength. The Axie Infinity price revives a strong upswing, while the Hyperliquid price surges as HIP-3 open interest marks an ATH. Additionally, the Pump.fun price also surged extensively and reached a critical turning point.
With these moves, it appears the AltSeason could be nearby, but observing the on-chain data reveals that altcoins are at a structural turning point, but not a comfort zone.
Altcoin Market Structure Shows Signs of Breakdown
The chart highlights a critical shift in the broader altcoin market structure. The long-term uptrend that had been in place since 2023 has already been broken, and the recent price action confirms growing weakness. Most notably, a key support zone, one that previously acted as a base during accumulation phases and sustained multiple rallies, has now flipped into resistance. The latest retest of this level resulted in a clear rejection, signaling that buyers are no longer in control at this range.
This shift changes the character of the market. Rallies are no longer signs of strength but tests of overhead resistance. While prices are still holding near recent lows, the failure to reclaim this former support suggests increasing downside risk. From here, altcoins face a narrow window: either reclaim this resistance quickly and re-establish acceptance, or risk entering a prolonged phase of weak bounces, lower highs, and sustained underperformance as liquidity and attention rotate elsewhere.
Liquidity Rotation Signals Risk-Off Conditions, Limiting Altseason Potential
The Santiment chart highlights a clear contraction in on-chain liquidity, with the combined market capitalization of the top 12 stablecoins dropping by $2.24 billion over the past 10 days. As of January 26, 2026, this represents an approximate 0.8% decline in stablecoin supply, coinciding with Bitcoin pulling back toward the $87,000 level.
This reduction is critical. Stablecoins act as the primary liquidity fuel for altcoin speculation. When their supply contracts instead of expanding, it suggests capital is leaving risk assets rather than rotating within crypto. In parallel, growing allocations toward gold and silver point to a broader risk-off rotation. Until stablecoin market caps stabilize and begin expanding again, the conditions required for a sustained altseason remain structurally weak.
Can We Expect an Altseason in 2026?
Current market conditions continue to reflect softening momentum across altcoins, contracting stablecoin liquidity, and a broader rotation toward defensive assets. Together, these factors do not support the kind of sustained, broad-based rally typically associated with a full altseason.
Adding to this view, Tom Lee, Chairman of Bitmine, has highlighted the ongoing FOMO-driven rally in gold and silver as a key force diverting liquidity away from crypto markets. According to Lee, this rotation has acted as a temporary ceiling on crypto upside. However, he also notes that once momentum in traditional safe-haven assets fades, capital could rotate back aggressively into Bitcoin and Ethereum.
Even so, a liquidity shift back into crypto would not automatically trigger a classic altseason. Instead, 2026 is more likely to see selective, rotation-driven rallies. Here, only certain altcoins demonstrate strong bullish phases at intermittent intervals rather than a synchronised market-wide surge.