What’s behind ‘bearish’ altcoin action: Amberdata

Even before LIBRA, altcoins were having a rough start to the year

article-image

Artwork by Crystal Le

share


This is a segment from the Empire newsletter. To read full editions, subscribe.


Admittedly, it’s been a pretty bearish week for crypto, though an optimist can still find pockets of good news.

Amberdata’s Greg Magadini thinks the data out of the derivatives markets shows that options trading volume on Solana peaked around the inauguration last month which could imply that SOL hit its top. 

“I think the bearish story within altcoins is that the supply of altcoins is essentially unlimited. And so we’re seeing so many new altcoins … every day there’s just kind of a new increase in the total altcoin float, which is completely opposed to the limited fixed supply of the bitcoin value proposition. And so I think that dynamic is hard to overcome,” Magadini explained. 

The divide is simple and can be seen outside of crypto, too. It’s what Magadini would call the hard money narrative: Gold’s going up while commodities like coffee and cocoa become more expensive. Add in the discussions we’ve had about a potential AI bubble and, well, the bitcoin vs. crypto discussion makes a bit more sense.

A look at ETH’s block trades courtesy of Amberdata

Bitcoin, in this case, is still the solid narrative. Everything’s going swimmingly right now and we’re all waiting to hear about a potential bitcoin reserve. For altcoins, which don’t have the same catalysts on the horizon, the picture is unfortunately more bearish. 

This isn’t to say that bitcoin’s going to pop off though. Magadini thinks that we’ll continue to see it trade sideways, between $85,000 and $100,000 for the next two to three months. He told me this action is needed after the bullishness we saw going into the end of last year.

“I think during that hanging out period, bitcoin actually gains dominance. It’s a relatively strong asset. I think for the altcoin space, we’re getting a little bit of a flush out, and we’re really seeing that right now with SOL and ETH.”

“If we just look at the charts of ether and bitcoin [in terms of] the relative price, the fact that we had a huge spike lower for ether versus bitcoin is pretty rare because those are very correlated assets. The move that it had was a very volatile move, which is unusual. That was significant, that meant something. And we’re seeing the same thing with the SOL-BTC ratio, where it pretty much popped out at a local high on inauguration day and has just come down since,” he explained. His read is that it’s a sign of retail flow — or lack thereof.

And bitcoin’s block trades courtesy of Amberdata

It’s not something to be terribly worried about, he added, but rather it’s a natural sign that we may be hitting the speculative phase because there aren’t fundamentals tied to many altcoins just yet.
But, hey, at least we don’t have to blame everything on memecoins…right?


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

The MicroStrategy founder understood digital scarcity long before Bitcoin, and it’s a story of bubbles, brokers and a “monster bull run.”

article-image

DAS panelists shared strong venture capital takeaways, from how big a raise should be to the role VCs play in the industry

article-image

Titan Exchange CEO Chris Chung says Titan bests Solana’s incumbent DEX aggregator Jupiter on price 80% of the time

article-image

The SEC’s newest statement on PoW mining adds further clarity, though a commissioner points out its limits

article-image

Markets react to Fed Chair Jerome Powell’s comments at yesterday’s FOMC meeting

article-image

At DAS, the US president noted he’s called upon Congress to enact “simple, common-sense rules” for stablecoins and market structure