As of March, more than 40 percent of altcoins are trading at or near all-time lows. That is above the roughly 38 percent peak seen in the last bear market. On March 31, blockchain outlet BeInCrypto cited an analysis by analyst Darkfost saying altcoins are seeing their deepest drop in this cycle.

He said rising geopolitical tensions and macro volatility are weighing on risk assets across financial markets, with the impact especially pronounced in altcoins. "The market continues to suffer from heightened geopolitical tensions and the resulting volatility across financial markets," he said. "Altcoins are taking the biggest hit, and they have never been under such pressure in this cycle," he said.

Darkfost also pointed to structural problems. The total number of cryptocurrencies has topped 47 million. Solana has more than 22 million, Base has more than 18 million and BNB Smart Chain has 4 million tokens. He said the surge in token issuance has left the market oversaturated and funds dispersed.

He argued that "this massive number of cryptocurrencies leads to liquidity dilution and makes altcoins more vulnerable over time." He added that "this may help explain why a record-level downturn is appearing now." That suggests that if investment demand fails to keep pace with supply growth, many altcoins may struggle to attract sustained buying.

There was also an assessment that the typical pattern of an altcoin bull market has weakened. Matt Hougan (맷 호건), chief investment officer at Bitwise, said the classic rotation of funds from bitcoin to ether and then to speculative tokens is no longer working well. "A market where all coins rise together will not come," he said. "We will see an unconventional altcoin season," he said. He said the next cycle would focus rewards on projects that deliver results in real-world use cases rather than broad speculative momentum.

Darkfost also said extreme underperformance could create entry opportunities. He said it could be an attractive opportunity if investors can identify projects that remain relatively resilient even during selling phases.

The analysis gains support that it has become harder to expect a broad, across-the-board rise in altcoins as in the past, in an environment of thinning liquidity and a surge in token supply. It also said that in such phases, projects that prove real-world use cases and demand could instead stand out. It said the altcoin market is more likely to develop into a selection process rather than a broad rebound.

More than 40% of Altcoins near All-Time Lows The crypto market continues to suffer from the escalation of geopolitical tensions and the volatility this creates across financial markets. It is mainly altcoins that are suffering the most. They have never been under such… pic.twitter.com/6sGkBYJP57