Retail Traders Turn to Bitcoin and Ether After October’s Market Downturn

Retail traders turned back to Bitcoin and Ether after a significant crash in the crypto market in October, as the outlook for altcoins grew bleak. Data from Wintermute indicates that since 2022, retail investors preferred altcoins but shifted focus back to major cryptocurrencies in 2025.

The liquidation event on October 10 marked a pivotal change, pushing traders to return to Bitcoin and Ether. Despite initial reductions in their holdings of major coins, retail investors quickly reversed this trend after experiencing the impact of high leverage in the market.

“This shows the immediate defensive posture following the liquidation shock and growing concerns of contagion and an imminent bear market.”

— Translation: This demonstrates how traders quickly sought safety after the market shock and fears of a widespread downturn.

Wintermute’s analysis revealed that by the year’s end, retail and institutional investor positions aligned more closely, highlighting a preference for liquidity and stability rather than taking on risky altcoins.

Altcoin Rallies Show Weakness

The return to major cryptocurrencies stifled any potential altcoin season during this cycle, leading to a stark underperformance of altcoins in 2025. The typical rally of altcoins diminished significantly, lasting just an average of 19 days compared to around 60 days in 2024.

“This led to altcoin rallies feeling like tactical trades rather than high conviction trends.”

— Translation: This resulted in altcoin price increases feeling more like short-term strategies instead of strong, consistent trends.

Resilience in the Market

Although altcoins struggle to gain traction as 2026 approaches, the panic from the October crash appears to be easing, fostering a renewed sense of confidence among investors. Matt Hougan, Bitwise’s chief investment officer, indicated that the market’s recovery could be attributed to investors moving past the October events.

The total market capitalization recently hit a yearly high, marking a gain of 10% or approximately $300 billion since January 1, reaching $3.34 trillion, as reported by CoinGecko.