The altcoin market is showing signs of overheating, as spot trading volume is now four times higher than that of Bitcoin. The sharp rise in activity has also pushed leverage higher across the market.
This has prompted one trader to take profits and reduce exposure to altcoins.
Bitcoin Over Altcoins?
Doctor Profit said ONDO was sold with a 73% profit, while HBAR was closed with a smaller gain. XRP remains on watch, with a possible entry planned at a better price. The trader said there is no interest in buying altcoins while market conditions remain this hot. He also called altcoins a “great distraction and liquidity grab” and went on to add,
“This is why I’m out of Alts!”
Instead, the trader is betting on a Bitcoin correction, reiterating his previous stance. A short position was opened at $86,200, and additional short orders were placed between $86,500 and $89,500.
While he remains bullish overall, Doctor Profit had previously pointed to a potential pullback toward $79,000, near the 50-week moving average, before the broader uptrend continues. The analyst had flagged bearish signals across RSI, MACD/PPO, and MFI, while ADX showed weaker trend strength.
Warning Signs Emerge
A few days earlier, Darkfost also identified a few warning signs. According to the analyst, Total2, which tracks the altcoin market cap including Ethereum, absorbed more than $371 billion in inflows since June 2026. This is a 45% increase in just a few months.
The shift is also visible across Binance, where 87% of listed altcoins are trading above their 200-day moving average. That is a major change from August, when 80% were still below the crucial trend level. Darkfost explained that the move is indicative of a growing euphoria around altcoins, something that has historically been difficult to sustain for long.
Another signal is the rise in altcoin deposits to exchanges. Weekly deposit transactions have climbed above 22,700 on Binance and 8,300 on Coinbase, with another 32,000 or so across other platforms. The numbers are still below the levels seen early in the previous bull cycle. However, Darkfost also pointed to a developing bearish divergence on Total2’s RSI, which suggests that the altcoin momentum could be starting to cool after the recent surge.
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