Retail traders spooked by the massive crypto liquidation event in October fled back to major cryptocurrencies as their hopes for an altcoin season were dashed, according to Wintermute.
Since around 2022, retail traders have been net sellers of majors such as Bitcoin (BTC) and Ether (ETH), preferring altcoins instead, but that pattern broke in 2025, according to Wintermute’s “Digital asset OTC market 2025” report released on Tuesday.
The October 10 liquidation event and market crash “marked a clear inflection point,” accelerating retail’s rotation back into Bitcoin and Ether, the firm said.
Data shows that retail investors were actively reducing exposure to the majors at the time, but quickly pivoted back into them after the record leverage flush.
“This shows the immediate defensive posture following the liquidation shock and growing concerns of contagion and an imminent bear market.”
Wintermute reported that by the end of the year, retail positioning had converged with institutional, “prioritizing liquidity and resilience over peripheral risk.”
Altcoin rallies lacked conviction
The move back into majors prevented any altcoin season this cycle, and altcoins “materially underperformed” in 2025.
“Narratives continued to emerge, but failed to persist,” the report stated.
The average altcoin rally lasted roughly 19 days in 2025, down from around 60 days the year before, “reflecting reduced conviction and more tactical risk-taking,” Wintermute added.
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This does not mean that there was a lack of narratives, but a market “showing clear signs of exhaustion,” where rallies quickly faded.
From 2022 to 2024, altcoin rallies typically lasted from 45 to 60 days with sustained narratives including memecoins and AI. However, the median length of altcoin rallies in 2025 was just 20 days.
“This led to altcoin rallies feeling like tactical trades rather than high conviction trends.”
October crash fears are subsiding
While altcoins have yet to see any real momentum going into 2026, fears and panic over the October crash have subsided, leading to renewed confidence going forward.
Earlier this month, Bitwise chief investment officer Matt Hougan said, “One of the reasons I think we’ve rallied to start this year is that investors have put October 10 in the rearview.”
Total market capitalization is at its highest level so far this year, following a 10%, or $300 billion, gain since Jan. 1 to reach $3.34 trillion on Wednesday, according to CoinGecko.
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