Warnings Issued on the Sustainability Risks of an Ongoing Altcoin Market Upswing by Matrixport
In the current market landscape of August 2025, the altcoin sector exhibits a cautious optimism, characterised by limited but early momentum. This trend is driven primarily by selective gains in major altcoins such as Ethereum and XRP, but overall market enthusiasm remains subdued.
The dominance of Bitcoin in the market remains high at 57.8%, indicating its continued market leadership and the constraint on altcoin gains. However, the total crypto market capitalization has seen a modest increase of 2.2% recently, partly due to regulatory clarity and post-halving dynamics.
One of the key players in the market, Ethereum, has surged above $4,000, with growing institutional interest. This surge is largely attributed to Ethereum's foundational role in DeFi and NFTs. Meanwhile, XRP and meme coins like TROLL have shown early momentum, albeit with speculative interest that carries inherent risks.
However, Matrixport analysts have expressed concerns about the sustainability of the altcoin market. They highlight that the price recoveries so far are short-term and focused on a few tokens, with weak buying pressure in derivatives markets and many investors remaining sidelined.
Positive trends such as the rise in DeFi TVL (up 23.6% month-on-month) and the surge in NFT trading volume (nearly 50% increase in July) indicate pockets of growth, particularly on Ethereum and certain platforms. These trends reflect renewed risk-on sentiment amid positive regulatory developments.
Matrixport, a digital assets financial services platform, remains bullish on Bitcoin's price, forecasting a surge towards $116,000 on institutional adoption and scarcity. However, they note that seasonal weakness around August-September may impact short-term momentum, including for altcoins.
Investors are advised to closely monitor several factors that heavily influence altcoin performance, such as on-chain data, institutional flows, futures funding rates, and regulatory developments, in the evolving market environment.
Elena Zenth, a Senior Crypto Journalist at Coincu.com, is a female blockchain analyst, crypto journalist, and web3 analysis expert who has been working in journalism for over 10 years, focusing on blockchain and cryptocurrency. Known for her fearless approach to exposing fraud in the crypto space, Elena prioritises an audience-first mindset and maintains an active presence on social media where she shares crypto news and analysis.
With her analytical and detail-oriented approach, Elena Zenth has earned a Master's degree in Journalism from Moscow State University and a certificate in Blockchain Business Models from Coursera. She has worked for several years in the blockchain and cryptocurrency industry and can be found on various social media platforms.
Sources:
- Coincu.com
- Matrixport.com
- Cointelegraph.com
- Blockchain.news
- Bloomberg.com
- Even though Bitcoin continues to dominate the market with a 57.8% share, the altcoin sector, such as Ethereum and XRP, is showing a cautious optimism, with limited but early momentum, driven by selective gains and supportive regulatory clarity.
- While positive trends like DeFi TVL increases and NFT trading volume surges indicate pockets of growth, Matrixport analysts have expressed concerns about the sustainability of the altcoin market due to short-term price recoveries, weak buying pressure, and many investors remaining sidelined.
- Investors should closely monitor various factors influencing altcoin performance, such as on-chain data, institutional flows, futures funding rates, and regulatory developments, to make informed decisions about their investments in the evolving cryptocurrency market.
