Altcoin declines after 4 years: Narrowing volatility signals an upcoming reversal?

Since 2022, altcoins have continuously declined against BTC, forming a structure of gradually lower highs and lower lows that has persisted for many years. Currently (February 5, 2026), BTC is trading at $71.45K with a 24-hour decrease of -7.68%, reflecting broader market volatility. But more noteworthy are the subtle signs gradually emerging, indicating that this long-term trend may soon enter a new phase.

Wedge Formation: A Sign of the End of the Cycle

This is no longer an ordinary correction. The price structure has become clear enough to recognize that altcoins are in a compression phase (descending wedge) — a classic technical pattern that appears at the end of prolonged down cycles. Capital flow has almost entirely concentrated into Bitcoin during this period, while most altcoins have been left behind, creating a stark performance gap between the two asset groups.

Capital Flows Focused on Bitcoin, Altcoins Left Behind

Throughout 2022-2026, investment capital has mainly circulated around Bitcoin, gradually amplifying altcoin weakness. However, an important signal is emerging: this concentration is gradually losing its initial momentum. As other assets remain left behind, Bitcoin alone cannot sustain a strong trend forever.

Narrowing Volatility Range: Major Change Ahead?

In recent months, the volatility range of altcoins against BTC has been narrowing, with selling pressure significantly easing. These are signals indicating that the downward momentum is weakening, and the market is gradually accumulating energy for a breakout. When the volatility range is tightly compressed like this, it often sets the stage for a major move to occur.

Capital Rotation: When Will It Happen?

Looking at the price structure and market behavior, it is highly likely that capital shifting from Bitcoin to altcoins, combined with new inflows, could begin at any time from now until next year. Technical data does not predict luck but reflects a prolonged compression phase. The narrowing volatility of altcoins is the foundation for an explosive move to be accumulated. When the market shows signs of entering a new phase, assets that have long been neglected could suddenly become the focus of capital flows.