When the Crypto Market Becomes Dangerous: Lessons from the Altcoin Cash Flow

The current cryptocurrency market is showing a risk signal that investors need to pay special attention to: the open interest (OI) of altcoin is rising to the sky while the price of Bitcoin is almost flat. At first glance, many people will think this is a positive sign because capital is flowing into altcoin. But in reality, history shows that this is often a harbinger of a major correction. Lessons from the End of 2024 In December 2024, the market witnessed a similar scenario. At that time, altcoins were active, with strong capital inflows, but Bitcoin remained “still”. The result: shortly after, the entire market dropped more than 30% and remained stagnant for several months, leaving investors trapped. Why Is This A Bad Signal? Altcoins are more sensitive than Bitcoin: When capital does not flow into Bitcoin but instead moves to altcoins, it is often the final stage of a short-term rally. High liquidation risk: An increase in open interest means more leveraged positions, and just a small drop can create a domino effect. FOMO leads to “musical chairs”: Investors rush into altcoins like a game of musical chairs—everyone is trying to sit down, but when the music stops, some will be left standing outside. Warning for Investors At this time, the excessive excitement in altcoin may be the trap. When people rush to buy without looking at the bigger picture, those who will bear the greatest risk will be those who enter last. 👉 Don't let yourself be the one who “stands still” when the music stops. Maintain trading discipline, manage risk, and remember that preserving capital is more important than chasing short-term profits.