[Digital Today reporter Jinju Hong (홍진주)] The altcoin market has broadly entered a deep bearish phase, with a large number of tokens pushed down close to all-time lows (ATL).

The Crypto Basic, a blockchain media outlet, reported on March 30 that CryptoQuant analyst Darkfost said more than 40 percent of altcoins are trading at ATL levels or in a nearby range. That is higher than the previous peak of about 38 percent recorded in past bear markets, suggesting this cycle is harsher for altcoins.

The market shock is showing up differently across assets. Bitcoin (BTC) is down by about the 40 percent range from its all-time high (ATH) and is relatively resilient. Altcoins have posted much steeper declines. XRP is down by about the 60 percent range, Solana (SOL) by more than 70 percent, and Cardano (ADA) has plunged by more than 90 percent.

Downside pressure is even stronger for small and mid-sized altcoins. Some tokens have already set new all-time lows or have been pushed to just above them, leaving them exposed to the risk of further declines. This is seen as a sign that the market’s overall demand base is weakening beyond a simple price adjustment.

Ethena (ENA) recently hit $0.09256, setting a new record low, and VeChain (VET) is trading at $0.006757, down 98 percent from its peak. Other assets seen as promising, such as Arbitrum (ARB) and Sui (SUI), also face the risk of falling below their previous record lows.

A shift in market structure is cited as a key backdrop to the weakness. The biggest factor is an explosive rise in the number of tokens. The number of cryptocurrencies has surpassed 47 million, with tens of millions of tokens existing within certain ecosystems alone. This has intensified liquidity dilution, as investment funds are unable to concentrate on specific projects and are instead dispersed broadly.

In a market with thinner liquidity, prices are bound to swing sharply even on small selling pressure. At the same time, an excessive number of competing projects has made it harder for individual altcoins to secure sustained demand. As a result, the analysis said altcoins overall are in a structurally unfavorable environment.

Some also view this extreme underperformance phase as not necessarily implying only negative outcomes. Darkfost said that when the market is excessively depressed, some high-quality projects can instead enter undervalued territory. He stressed that this applies only when investors can select projects with solid fundamentals and a high likelihood of survival.

For now, the market’s key watch point is clearly “selection and survival.” With oversupply and intensifying competition raising the likelihood that many projects will be eliminated, a view is emerging that only some with real utility and capital inflows will survive. Which projects endure and recover over the coming months is expected to be an important turning point that determines the direction of the altcoin market.