Quick Breakdown
- Retail traders rotated back into Bitcoin and Ether after October’s liquidation shock
- Altcoin rallies shortened dramatically, signalling weaker conviction
- Market confidence is recovering as October crash fears fade
Retail crypto traders abandoned hopes of an altcoin season after October’s massive liquidation event, rotating sharply back into Bitcoin and Ether as risk appetite collapsed, according to Wintermute.
Liquidity came into crypto in 2025, but where did it go?
Using Wintermute’s proprietary OTC flow, our Digital asset OTC markets 2025 report shows where capital actually went and why market structure fundamentally changed
Read on for our key findings ↓ pic.twitter.com/Zw2pYRrozB
— Wintermute (@wintermute_t) January 13, 2026
In its Digital Asset OTC Market 2025 report released Tuesday, the market-making firm said the October 10 leverage wipeout marked a decisive turning point for retail behaviour, accelerating a shift toward more liquid and resilient assets.
For years, retail traders had steadily reduced exposure to major cryptocurrencies in favour of higher-risk altcoins. That trend, which began around 2022, reversed abruptly in 2025 as fears of contagion and a broader bear market took hold.
October liquidation triggers defensive shift
Wintermute noted that retail investors were actively selling Bitcoin and Ether heading into the October crash, but quickly reversed course once the liquidation cascade hit.
“The event marked a clear inflection point,”
the report said, highlighting a defensive pivot driven by concerns over systemic risk and market instability.
By year-end, retail positioning had largely aligned with institutional strategies, prioritizing liquidity and capital preservation over speculative bets. This convergence, Wintermute said, came at the expense of altcoins, which failed to attract sustained inflows.
Altcoin rallies fade as conviction weakens
The return to major cryptocurrencies effectively derailed any meaningful altcoin season in 2025. While new narratives continued to emerge, none gained lasting traction.
Wintermute found that the average altcoin rally lasted just 19 to 20 days in 2025, down sharply from roughly 45–60 days in previous years. The shorter cycles suggest traders treated altcoin moves as short-term tactical opportunities rather than high-conviction trends.
Although altcoins remain sluggish heading into 2026, market sentiment has improved as fears surrounding the October crash fade. Bitwise CIO Matt Hougan recently said investors have
“put October 10 in the rearview,”
helping fuel renewed confidence.
Crypto’s total market capitalization has climbed 10% since January 1, adding about $300 billion to reach $3.34 trillion, according to CoinGecko.
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