#山寨币强势反弹 Shanzhai breakout—has the bull market returned?
In the past few days of Bitcoin “stabilizing,” the altcoin season has shown a rare, intense burst of volatility. Tokens with a circulating market cap of less than 20 million USD—some have multiplied by 3x or 5x within a few days, while others have approached 10x. Without major progress, without ecosystem breakthroughs, without new institutional players entering, prices have still been pushed up like this.
This phenomenon has a ready-made explanation: altcoins are high Beta assets. When Bitcoin rises, altcoins run even faster. This claim holds statistically, but it doesn’t fully explain it.
High Beta can explain why altcoins rise more than Bitcoin, but it can’t explain gains that are dozens of times larger. Where does this multiple come from? From another matter entirely. The current altcoin season index is 34, and Bitcoin’s dominance is 58.5%. These two numbers tell you at the same time that this market is still quite far from a true altcoin season. But in this market where there is no altcoin season, some tokens are moving with the kind of magnitude that only appears during altcoin seasons.
From December 2024 to April 2026, excluding Bitcoin and Ethereum, the total market cap of altcoins shrank from a peak of about 1.16 trillion USD to about 700 billion USD, evaporating nearly 40%. When market cap shrinks to a sufficiently low level, the game rules change: prices are no longer determined by market consensus, but by who controls enough chips. This is a loophole created by oversold conditions, not a signal sent by a bull market.
Altcoins have simply fallen too much. In the blockchain space, there’s the concept of a 51% attack: if someone controls more than half of the network’s hash power, they can tamper with records, double-spend tokens, and rewrite history. The capital version of this logic is even simpler: it doesn’t need technology, doesn’t need hash power—only money. And in this round, the altcoin market has wiped out nearly 40% of its market cap, lowering the entry threshold by about the same percentage.
As of early April 2026, the total market cap of altcoins is about 700 billion USD, down roughly 40% from the December 2024 peak of about 1.16 trillion USD. If you use the end of 2025 as the cutoff, the decline is about 44%. The two measurement periods differ in timing, but the direction is consistent: the overall size of this market has already approached a “halving.”
What does a “halving” of market cap mean? In a market with a circulating market cap of 50 million USD, one million USD accounts for 2% of circulating supply; in a market with a circulating market cap of 50 million USD, one million USD accounts for 20%. The threshold drops tenfold, but the amount of money doesn’t change. After oversold conditions, the cost of controlling the market becomes calculable. If it can be calculated, it can be executed.
The altcoin surge of the SIREN token over the past two days provides a useful analysis case.
SIREN had rapidly surged in the late March period, carving out a noticeable rally. On March 24, on-chain analyst EmberCN issued a warning: a single entity may have controlled as much as 88% of SIREN’s circulating supply—equivalent to about 1.8 billion USD at that time. As the news spread, SIREN on that day fell from 2.56 USD to 0.79 USD, a drop of more than 70%. During the rapid price escape, almost nobody could get out at a reasonable price, because that price had never been formed by the market in the first place.
A conservative estimate is that 48 wallets hold about 66.5% of the circulating chips. Even using this lowest-end estimate, a very limited set of addresses already has the structural conditions needed to steer the direction of prices. From the moment price formation began, the symmetry of this game had already been broken.
Retail investors, holding what they believe is money participating in a free-market trade, entered a container with a pre-set exit path. SIREN is neither an isolated case nor a black swan—it’s a structural norm for oversold altcoins. The deeper it falls, the less money is needed, and the easier it is to be hijacked.
Oversold is not a discount—it’s fragility. And this round’s overall 40% drop in market cap means this fragility has expanded systemically across the entire market.
Shorts are fuel
If the story were only half of this, the logic would be one-way: the market maker locks chips, pumps to distribute, retail investors pick it up, and then it crashes for good. But for small-cap altcoin markets, there is often another structural layer on top: shorts become the ignition material. During SIREN’s rapid price rise, the funding rate touched -0.2989% per 8 hours, annualized to about -328%. Translating that: to short SIREN and hold the position, every 8 hours you must pay the longs funding fees of about 0.3% of principal. If you hold for a month, this fee alone can consume more than 25% of the principal, not counting the mark-to-market losses caused by price increases. This figure isn’t uncommon in small-cap altcoin markets. Some tokens, in extreme conditions, saw funding rates drop as low as -0.4579% per 8 hours, annualized to about -501%. At this level, short sellers aren’t facing the risk of being wrong about direction—they face the certainty of being slowly ground down by a machine. Even if the direction is ultimately correct, they still get exhausted before the day they’re waiting for arrives.
When you see an altcoin up 80% and decide to short it, waiting for a pullback, every one of your short positions is paying interest to the long side. At the same time, once the price continues rising and hits your liquidation line, the system will automatically buy at market price to close your position on your behalf. This forced buy further pushes up the price.
This is how the transmission chain of a short squeeze works: prices rise, shorts incur paper losses; when the paper losses hit the forced liquidation line, the system automatically buys at market to close; that buy pushes prices higher, triggering more shorts; then another round of buying arrives. In small-cap markets with thin liquidity, each order can move prices by a larger amount, and the chain’s transmission efficiency is far higher than in large-cap assets.
There’s an asymmetry here that’s often overlooked. When people see a token surge 90% and decide to short it, they typically believe they’re making a probability-correct judgment: “It’s gone up so much that it must pull back.” But in a market with highly concentrated holdings locked in, that judgment has to fight not only against the price path, but also the funding fee draining 0.3% of principal every 8 hours, and the chain-reaction triggered by passive buys once the liquidation line is hit.
This game isn’t symmetric from the start. Extreme negative funding rates are the machine’s dashboard reading. The shorts have already accumulated, ammunition is loaded. Right now, accelerating the pump leaves the other side with only two choices: get liquidated and exit, or chase higher and enter. Both choices are effectively fueling the price. This isn’t a rise formed by market consensus—it’s a structurally designed one-way consumption.
No new money in the bustling market
On the BSC chain, weekly DEX trading volume is up 97% year-over-year, the altcoin season index is 34/100, and Bitcoin’s dominance rate is 58.5%. These three numbers can all be true at the same time, yet they also contradict each other. The on-chain activity is indeed hot, but the latter two numbers tell you that this market is still in a “Bitcoin season”: fewer than half of the mainstream altcoins outperform Bitcoin, and the dominant capital is highly concentrated in Bitcoin—far from spreading outward. But the three numbers also point to the same reality: this is existing capital cycling faster, not new money entering. The excitement is real, but excitement doesn’t equal expansion. Institutional capital movements provide further evidence.
At the beginning of April, the Solana ETF’s single-day net inflow returned to zero. Previously, on March 30 it had already recorded a net outflow of 6.2 million USD; the XRP ETF continued net outflows at the start of the month, with only about 64,600 USD of minor inflow on April 2. Although the Ethereum ETF saw a single-day net inflow of 1.2 billion USD on April 6, it had already had a net outflow of 71 million USD the day before.
The overall pattern of institutional funds in the altcoin direction is to wait, not to rotate. Compared with the real altcoin season of 2021, the gap is structural. In that cycle, from the start of the year to May, Bitcoin’s dominance rate fell from above 70% to below 40%, with a low around 39%. Clear rotation between Bitcoin and altcoins was visible, with the altcoin season index exceeding 90 at times. That was a comprehensive expansion driven by an overflow of macro liquidity: the leftover warmth of the DeFi summer remained, retail FOMO poured in on a large scale, the stablecoin issuance volume expanded rapidly during the same period, and incremental funds kept flowing into the entire ecosystem.
Today’s 34 and 58.5% are a different picture. The engine has just been preheated, and it’s far from full-speed operation. There’s also a variable unique to this cycle. Institutional capital entering the market through ETFs follows the internal logic of asset allocation—not the emotional logic of the crypto market. What institutions do is “adjust Bitcoin exposure to X%,” not “the altcoin season is coming, so add to altcoins.” Structurally, this tranche of funds will not spontaneously rotate into the altcoin market unless there is an explicit instruction. This is the most fundamental structural difference between 2021 and 2026: in 2021, among the money that entered, a large portion was retail money with “follow the heat wherever it is” behavior. Today, institutional money is anchor-based: the path is fixed and does not drift with market sentiment.
The on-chain trading activity of 97%+ is real, but a market without new money is zero-sum. Every winner’s gains correspond to another player’s losses, and the total size of the pool doesn’t grow. Existing-asset games don’t necessarily collapse, but they determine the structure of this game; the excitement only belongs to those already in the arena, those who already have chips. As for the latecomers, they are usually using their own money to complete the last mile of others’ distribution.
Epilogue
Returning to the initial set of data: Bitcoin has risen by about 0.85% over four days, while a few small-cap tokens in the same period have multiplied by several times. Now you have a framework. Bitcoin’s rise is one thing: the macro environment is catching its breath, institutional capital is testing the water, and the market is waiting for the next clear signal.
The altcoin breakout is another matter entirely. After oversold conditions, the low market caps create structural loopholes: a small amount of capital, inside thin-liquidity containers, can lever prices. Extreme negative funding rates turn shorts into fuel for longs.
When the two things happen at the same time, it doesn’t mean they’re telling the same story. The altcoin season index is 34, and Bitcoin’s dominance is 58.5%. By 2021 historical standards, this machine hasn’t even finished its warm-up program yet. Bitcoin’s dominance needs to fall from 58% toward the level of about 39% from that time; institutional capital needs to expand from “Bitcoin allocation” to “crypto asset portfolio allocation”; and incremental capital needs to keep flowing in rather than cashing out at the highs. None of these can be solved by a single limit-up. In this machine, there are two kinds of people: one knows who it’s running for, and the other is the fuel it runs on.
BTC’s rise is a signal; the altcoin explosion is an echo. Only by distinguishing these two can you make a choice in this market that isn’t pre-designed by the machine.
In the past few days of Bitcoin “stabilizing,” the altcoin season has shown a rare, intense burst of volatility. Tokens with a circulating market cap of less than 20 million USD—some have multiplied by 3x or 5x within a few days, while others have approached 10x. Without major progress, without ecosystem breakthroughs, without new institutional players entering, prices have still been pushed up like this.
This phenomenon has a ready-made explanation: altcoins are high Beta assets. When Bitcoin rises, altcoins run even faster. This claim holds statistically, but it doesn’t fully explain it.
High Beta can explain why altcoins rise more than Bitcoin, but it can’t explain gains that are dozens of times larger. Where does this multiple come from? From another matter entirely. The current altcoin season index is 34, and Bitcoin’s dominance is 58.5%. These two numbers tell you at the same time that this market is still quite far from a true altcoin season. But in this market where there is no altcoin season, some tokens are moving with the kind of magnitude that only appears during altcoin seasons.
From December 2024 to April 2026, excluding Bitcoin and Ethereum, the total market cap of altcoins shrank from a peak of about 1.16 trillion USD to about 700 billion USD, evaporating nearly 40%. When market cap shrinks to a sufficiently low level, the game rules change: prices are no longer determined by market consensus, but by who controls enough chips. This is a loophole created by oversold conditions, not a signal sent by a bull market.
Altcoins have simply fallen too much. In the blockchain space, there’s the concept of a 51% attack: if someone controls more than half of the network’s hash power, they can tamper with records, double-spend tokens, and rewrite history. The capital version of this logic is even simpler: it doesn’t need technology, doesn’t need hash power—only money. And in this round, the altcoin market has wiped out nearly 40% of its market cap, lowering the entry threshold by about the same percentage.
As of early April 2026, the total market cap of altcoins is about 700 billion USD, down roughly 40% from the December 2024 peak of about 1.16 trillion USD. If you use the end of 2025 as the cutoff, the decline is about 44%. The two measurement periods differ in timing, but the direction is consistent: the overall size of this market has already approached a “halving.”
What does a “halving” of market cap mean? In a market with a circulating market cap of 50 million USD, one million USD accounts for 2% of circulating supply; in a market with a circulating market cap of 50 million USD, one million USD accounts for 20%. The threshold drops tenfold, but the amount of money doesn’t change. After oversold conditions, the cost of controlling the market becomes calculable. If it can be calculated, it can be executed.
The altcoin surge of the SIREN token over the past two days provides a useful analysis case.
SIREN had rapidly surged in the late March period, carving out a noticeable rally. On March 24, on-chain analyst EmberCN issued a warning: a single entity may have controlled as much as 88% of SIREN’s circulating supply—equivalent to about 1.8 billion USD at that time. As the news spread, SIREN on that day fell from 2.56 USD to 0.79 USD, a drop of more than 70%. During the rapid price escape, almost nobody could get out at a reasonable price, because that price had never been formed by the market in the first place.
A conservative estimate is that 48 wallets hold about 66.5% of the circulating chips. Even using this lowest-end estimate, a very limited set of addresses already has the structural conditions needed to steer the direction of prices. From the moment price formation began, the symmetry of this game had already been broken.
Retail investors, holding what they believe is money participating in a free-market trade, entered a container with a pre-set exit path. SIREN is neither an isolated case nor a black swan—it’s a structural norm for oversold altcoins. The deeper it falls, the less money is needed, and the easier it is to be hijacked.
Oversold is not a discount—it’s fragility. And this round’s overall 40% drop in market cap means this fragility has expanded systemically across the entire market.
Shorts are fuel
If the story were only half of this, the logic would be one-way: the market maker locks chips, pumps to distribute, retail investors pick it up, and then it crashes for good. But for small-cap altcoin markets, there is often another structural layer on top: shorts become the ignition material. During SIREN’s rapid price rise, the funding rate touched -0.2989% per 8 hours, annualized to about -328%. Translating that: to short SIREN and hold the position, every 8 hours you must pay the longs funding fees of about 0.3% of principal. If you hold for a month, this fee alone can consume more than 25% of the principal, not counting the mark-to-market losses caused by price increases. This figure isn’t uncommon in small-cap altcoin markets. Some tokens, in extreme conditions, saw funding rates drop as low as -0.4579% per 8 hours, annualized to about -501%. At this level, short sellers aren’t facing the risk of being wrong about direction—they face the certainty of being slowly ground down by a machine. Even if the direction is ultimately correct, they still get exhausted before the day they’re waiting for arrives.
When you see an altcoin up 80% and decide to short it, waiting for a pullback, every one of your short positions is paying interest to the long side. At the same time, once the price continues rising and hits your liquidation line, the system will automatically buy at market price to close your position on your behalf. This forced buy further pushes up the price.
This is how the transmission chain of a short squeeze works: prices rise, shorts incur paper losses; when the paper losses hit the forced liquidation line, the system automatically buys at market to close; that buy pushes prices higher, triggering more shorts; then another round of buying arrives. In small-cap markets with thin liquidity, each order can move prices by a larger amount, and the chain’s transmission efficiency is far higher than in large-cap assets.
There’s an asymmetry here that’s often overlooked. When people see a token surge 90% and decide to short it, they typically believe they’re making a probability-correct judgment: “It’s gone up so much that it must pull back.” But in a market with highly concentrated holdings locked in, that judgment has to fight not only against the price path, but also the funding fee draining 0.3% of principal every 8 hours, and the chain-reaction triggered by passive buys once the liquidation line is hit.
This game isn’t symmetric from the start. Extreme negative funding rates are the machine’s dashboard reading. The shorts have already accumulated, ammunition is loaded. Right now, accelerating the pump leaves the other side with only two choices: get liquidated and exit, or chase higher and enter. Both choices are effectively fueling the price. This isn’t a rise formed by market consensus—it’s a structurally designed one-way consumption.
No new money in the bustling market
On the BSC chain, weekly DEX trading volume is up 97% year-over-year, the altcoin season index is 34/100, and Bitcoin’s dominance rate is 58.5%. These three numbers can all be true at the same time, yet they also contradict each other. The on-chain activity is indeed hot, but the latter two numbers tell you that this market is still in a “Bitcoin season”: fewer than half of the mainstream altcoins outperform Bitcoin, and the dominant capital is highly concentrated in Bitcoin—far from spreading outward. But the three numbers also point to the same reality: this is existing capital cycling faster, not new money entering. The excitement is real, but excitement doesn’t equal expansion. Institutional capital movements provide further evidence.
At the beginning of April, the Solana ETF’s single-day net inflow returned to zero. Previously, on March 30 it had already recorded a net outflow of 6.2 million USD; the XRP ETF continued net outflows at the start of the month, with only about 64,600 USD of minor inflow on April 2. Although the Ethereum ETF saw a single-day net inflow of 1.2 billion USD on April 6, it had already had a net outflow of 71 million USD the day before.
The overall pattern of institutional funds in the altcoin direction is to wait, not to rotate. Compared with the real altcoin season of 2021, the gap is structural. In that cycle, from the start of the year to May, Bitcoin’s dominance rate fell from above 70% to below 40%, with a low around 39%. Clear rotation between Bitcoin and altcoins was visible, with the altcoin season index exceeding 90 at times. That was a comprehensive expansion driven by an overflow of macro liquidity: the leftover warmth of the DeFi summer remained, retail FOMO poured in on a large scale, the stablecoin issuance volume expanded rapidly during the same period, and incremental funds kept flowing into the entire ecosystem.
Today’s 34 and 58.5% are a different picture. The engine has just been preheated, and it’s far from full-speed operation. There’s also a variable unique to this cycle. Institutional capital entering the market through ETFs follows the internal logic of asset allocation—not the emotional logic of the crypto market. What institutions do is “adjust Bitcoin exposure to X%,” not “the altcoin season is coming, so add to altcoins.” Structurally, this tranche of funds will not spontaneously rotate into the altcoin market unless there is an explicit instruction. This is the most fundamental structural difference between 2021 and 2026: in 2021, among the money that entered, a large portion was retail money with “follow the heat wherever it is” behavior. Today, institutional money is anchor-based: the path is fixed and does not drift with market sentiment.
The on-chain trading activity of 97%+ is real, but a market without new money is zero-sum. Every winner’s gains correspond to another player’s losses, and the total size of the pool doesn’t grow. Existing-asset games don’t necessarily collapse, but they determine the structure of this game; the excitement only belongs to those already in the arena, those who already have chips. As for the latecomers, they are usually using their own money to complete the last mile of others’ distribution.
Epilogue
Returning to the initial set of data: Bitcoin has risen by about 0.85% over four days, while a few small-cap tokens in the same period have multiplied by several times. Now you have a framework. Bitcoin’s rise is one thing: the macro environment is catching its breath, institutional capital is testing the water, and the market is waiting for the next clear signal.
The altcoin breakout is another matter entirely. After oversold conditions, the low market caps create structural loopholes: a small amount of capital, inside thin-liquidity containers, can lever prices. Extreme negative funding rates turn shorts into fuel for longs.
When the two things happen at the same time, it doesn’t mean they’re telling the same story. The altcoin season index is 34, and Bitcoin’s dominance is 58.5%. By 2021 historical standards, this machine hasn’t even finished its warm-up program yet. Bitcoin’s dominance needs to fall from 58% toward the level of about 39% from that time; institutional capital needs to expand from “Bitcoin allocation” to “crypto asset portfolio allocation”; and incremental capital needs to keep flowing in rather than cashing out at the highs. None of these can be solved by a single limit-up. In this machine, there are two kinds of people: one knows who it’s running for, and the other is the fuel it runs on.
BTC’s rise is a signal; the altcoin explosion is an echo. Only by distinguishing these two can you make a choice in this market that isn’t pre-designed by the machine.
