The altcoin market is entering a more "critical phase," as exchange deposits are rising and a bearish divergence is forming on the charts, noted on-chain analyst known as Darkfost.
Since June, the Total2 indicator, which measures the market capitalization of altcoins including ETH, has recorded an influx of $371 billion, reflecting a 45% increase over a few months.
Daily chart of Total2 with RSI. Source: TradingView.However, the current RSI for this indicator has dropped into bearish territory, indicating an unstable growth pattern.
The analyst also highlighted trends on Binance. In August, 80% of altcoins traded below the 200-day moving average, but that figure has now decreased to 13%. He estimates that 87% of coins have entered a bullish phase.
Altcoin dynamics on Binance. Source: CryptoQuant."This shift indicates a form of euphoria that has engulfed altcoins. However, historically, such dynamics are unstable and tend to fade over time," the expert emphasized.
Another "warning sign" is the surge in altcoin deposits on exchanges to levels not seen since October 2025. The weekly average number of deposit transactions exceeded 22,700 on Binance and 8,300 on Coinbase, with around 32,000 more on other platforms.
Weekly average of altcoin deposit transactions on exchanges. Source: CryptoQuant.It’s worth noting that Bitfinex has stated that Bitcoin is caught between bullish and bearish trends.
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