Altcoin spot trading volume has climbed to nearly four times the Bitcoin level, according to Glassnode, reaching its highest since September 2025 as traders rotate into higher-risk tokens. The Altcoin Season Index, tracked by CoinMarketCap, now sits at 62 percent, up from 50 percent a week ago and 33 percent a month ago.
The on-chain data firm said the surge in relative volume has historically appeared around local Bitcoin market tops, a pattern that has some analysts watching for a turn. Others see the rotation as a late-stage but still functional bull market phase, with capital spreading from the largest assets into mid- and small-cap tokens.
Exchange deposits point the other way
Not every signal is bullish. An analyst publishing as Darkfost questioned whether rising altcoin volume really means rising demand, pointing to exchange flow data that shows altcoin deposits climbing as well. Rising deposits often precede selling, since coins moved onto exchanges are typically there to be sold.
According to Darkfost, weekly average deposit transactions have climbed above 22,700 on Binance and 8,300 on Coinbase, with roughly 32,000 more spread across other exchanges. He said those levels have not been seen since October 2025, a period he linked to the previous market top.
Market breadth has improved sharply alongside the volume figures. About 87 percent of Binance-listed altcoins now trade above their 200-day moving averages, against only 13 percent below. The shift is recent: in the summer, roughly 84 percent of Binance spot altcoins sat below the long-term indicator. By September 19, around 70 percent had crossed back above it.
Capital has spread well beyond Bitcoin
The broader altcoin market has recovered in dollar terms too. Darkfost noted that TOTAL2, a measure of the market value of cryptocurrencies excluding Bitcoin but including Ethereum, has gained more than $371 billion since June, a rise of about 45 percent over the period.
He described the current state of the market as a form of altcoin euphoria but warned it could be entering a more fragile stage. One warning flag is a bearish divergence forming in the TOTAL2 relative strength index, which he said could be an early sign that momentum is starting to fade.
The privacy coin sector illustrates how far the rotation has gone. Zcash, a token that traded near $52 a year ago, has climbed above $1,500 and pushed its market value toward record territory, dragging the combined value of privacy-focused coins from roughly $7 billion to more than $33 billion in twelve months. Grayscale launched a Zcash ETF in late August, and the venture firm Paradigm disclosed a position in the token in mid-September, adding institutional cover to a rally that had already tripled the price since July.
Bitcoin consolidates while smaller coins run
The picture contrasts with the week Bitcoin had. Bitcoin slipped back toward $83,000 on Monday as bond yields climbed and geopolitical tension kept risk appetite in check, even as US spot bitcoin ETFs took in $2.4 billion last week, their strongest week since October 2025. Altcoins, in other words, are drawing volume and attention while the largest asset consolidates.
That split is a familiar feature of mid-cycle crypto markets. When Bitcoin stalls after a strong run, traders tend to hunt for higher beta exposure, and volume follows. Glassnode said spot traders are increasingly moving into altcoins, with total spot activity close to four times the Bitcoin level. The firm noted that this kind of demand for higher-risk assets has often appeared around local tops, though it has also marked the middle of strong advance phases in past cycles.
What the index actually measures
The Altcoin Season Index measures how many of the top 50 coins outperform Bitcoin over a rolling 90-day window. Readings above 75 are conventionally labeled altcoin season, while readings below 25 indicate Bitcoin dominance. At 62, the market sits in a transitional zone: altcoins are winning more often than not, but the threshold for a full season has not been crossed.
The index has moved quickly. A month ago, at 33 percent, Bitcoin was still outperforming most of the top 50. The jump to 62 percent inside four weeks is one of the faster rotations of the past year and mirrors the volume data Glassnode highlighted.
Two readings, one market
The volume and deposit data point in opposite directions, and the gap between them is the number to watch. Rising volume with rising deposits can mean churn rather than accumulation: coins arriving on exchanges, changing hands quickly and leaving sellers behind. Rising volume with falling deposits would be the healthier combination, since it suggests buyers are taking coins off exchanges after the trade.
Darkfost framed the question directly, asking whether a higher share of altcoin trading really equals higher demand. His own data suggests at least part of the volume reflects positioning for exits rather than fresh buying. On the other side of the ledger, the recovery in breadth, with 87 percent of listed altcoins above their long-term averages, is not something weak markets produce.
Traders watching the sector now face a familiar setup. Volume, breadth and sentiment all point the same direction, while exchange inflows and momentum divergences hint at fragility. The last time deposits hit these levels, the market topped within weeks. Whether this cycle follows the same script depends largely on whether Bitcoin holds its range and whether the macro pressure from yields and oil eases.
For now, the data shows a market that has broadened considerably from its Bitcoin-led phase. Whether that breadth signals health or a late-cycle peak is the question the next two weeks of deposit and volume data should answer.