Analysts say the first warning signal has emerged in the altcoin frenzy as upward momentum may be fading.

On September 27, BlockBeats reported a note from CryptoQuant analyst Darkfost saying that on-chain data suggested the altcoin market may be entering a more critical phase. The core fact is simple: since June 2026, Total2, a measure of the total market value of altcoins that includes ETH, has absorbed more than $371 billion in capital and grown by 45% within months. That rapid expansion has made the market look powerful, but the same data also carried an early warning: the rally may be starting to lose steam.

A broad move above the trend line

Darkfost pointed to the number of Binance-listed altcoins trading above their 200-day moving average, a common gauge of whether a market is still trending upward or still under pressure. This August, about 80% of those altcoins were below the 200-day moving average. By the latest reading, that share had fallen to 13%. In other words, 87% of Binance-listed altcoins had reversed their previous downtrend and entered a phase of upward momentum.

That shift matters because narrow leadership can turn into broad participation, and broad participation can make a bull phase feel self-reinforcing. More coins rising above a long-term trend line also suggests that money has flowed beyond a few headline assets. For readers, the signal is not just that prices have moved, but that the movement has become unusually widespread.

Deposits return to a level linked to the last top

The second warning came from exchange flows. Darkfost said altcoin deposits into trading platforms had climbed to a level not seen since October 2025, a period he described as the previous market top. At the time of the note, Binance’s weekly average deposit transactions exceeded 22,700, Coinbase’s weekly average deposit transactions exceeded 8,300, and other trading platforms combined recorded about 32,000 such transactions.

A rise in deposits can imply that traders are moving coins to platforms where they could be sold, exchanged, or used as collateral. It does not prove selling will happen immediately, but it often raises the probability that market pressure is being prepared. The comparison with October 2025 is important: the last time similar deposit levels appeared, the market was near a cycle peak. Even so, Darkfost noted that current altcoin inflows to trading platforms were still relatively limited compared with the early stage of the previous bull market. That distinction keeps the reading cautious rather than conclusive.

Momentum divergence and what it implies

The final signal was a bearish divergence in the Relative Strength Index for Total2. A divergence occurs when price or market value moves in one direction while the momentum indicator moves in another, often suggesting that the trend is not as strong as it appears. In this case, the warning was not that the altcoin market had already turned down, but that the pace of the move may be weakening after a period of intense capital inflows.

For readers, the takeaway is that the altcoin rally has two sides. On one side, there is a genuine expansion: over $371 billion in inflows since June 2026, a 45% rise in Total2, and 87% of Binance-listed altcoins moving above the 200-day trend line. On the other side, the same momentum has produced stress signals: deposits approaching levels seen around the October 2025 top, and a momentum indicator that no longer confirms the strength of the move. The next question is not whether the market can still rise, but whether it can absorb rising exchange activity without losing trend breadth.