Altcoins Surge 3% as Bitcoin ETFs See $681M Outflow

Smaller tokens outpace majors on institutional selling

Smaller-cap altcoins are outperforming major cryptocurrencies on Monday, with the CoinDesk 80 up around 3% over the past 24 hours, more than double the 1.2% gain in the CoinDesk 5. The outperformance comes as U.S. spot bitcoin ETFs recorded $681 million in net outflows last week, the most since June, while bitcoin trades below $83,500.

Bitcoin reached $84,000 on Sunday before pulling back. Ether gained 2.5% and trades near $2,560. The broader crypto market is rotating into smaller tokens despite persistent headwinds in institutional bitcoin products.

Most of the spot bitcoin ETF selling occurred on Wednesday and Thursday last week. Spot ether ETFs have not recorded a day of inflows since Sept. 28, marking a nine-day outflow streak that is the longest since June.

“Market makers have returned to majors,” said Joshua de Vos, research lead at CoinDesk. The comment reflects a tactical shift: while institutional flows are exiting bitcoin, retail and derivatives traders are chasing altcoin volatility.

Liquidity divergence between bitcoin and altcoins

Order-book depth for bitcoin and ether has recovered to pre-crash levels in dollar terms one year after the Oct. 10, 2025 flash crash. Altcoin liquidity, however, has continued to erode. This divergence is creating conditions for larger percentage moves in smaller tokens.

Zcash (ZEC) has climbed 6% with $5.46 billion in 24-hour futures volume. Open interest in ZEC rose 7%, with 1% additional contracts opened. The token is trading at an annualized funding rate of 10%.

NEAR gained 10%, with open interest rising 17% and 6% additional contracts opened. Starknet (STRK) dropped 7.7% on Monday after a volatile week: it gained 76% over seven days, including a 54% surge on Saturday and 33% on Friday.

LayerZero (ZRO) rose 21% in 24 hours and trades near $2.41, with market cap approaching $1 billion.

Derivatives activity and volatility metrics

Trading volume over 24 hours reached $126 billion, up 81%, while open interest rose just 2.44%, indicating traders are churning through positions faster but few are opening new ones. The Bitcoin Implied Volatility Index (BVIV) stands at 40, down from a year-to-date low of 34.

Longs comprise 52% of 24-hour taker volume, up from 48% last week. On Hyperliquid, oil shorts are trading at an annualized funding rate of 100%, reflecting heavy bearish positioning following President Donald Trump’s announcement that Russia would supply 300,000 metric tons of diesel to global markets. WTI futures fell 2% to $90 per barrel.

CoinMarketCap’s “Altcoin Season” indicator stands at 66 out of 100. Bitcoin is consolidating in a range between $80,000 and $88,000.

Security incident linked to altcoin flows

Zcash has climbed while appearing in the laundering trail from a Ledger hardware wallet supply-chain attack. The attacker routed stolen ether through Tornado Cash and then into ZEC via NEAR Intents. Ledger confirmed that at least one device sold by CryptoBilis, a Malaysian reseller, contained an unauthorized hardware implant, with estimated losses ranging from $86 million to $93 million.