Analyst Benjamin Cowen has a blunt explanation for the brutal altcoin crash shaking the market: this was never an altcoin cycle to begin with.
As red candles flash across trading screens and social media fills with panic, one question keeps coming up. Why did altseason never arrive? And more importantly, is this the end for crypto or just another painful phase?
According to Cowen, the answer lies in something most retail traders ignored this cycle: liquidity.
A Cycle Dominated by Bitcoin, Not Altcoins
For months, Bitcoin led the market while altcoins quietly bled out. Normally, crypto bull markets follow a pattern. Bitcoin rallies first. Then profits rotate into higher-risk altcoins. Euphoria builds. Social media explodes. Smaller tokens outperform.
But this time, something was different.
Cowen argues that this cycle topped on apathy, not euphoria. There was no explosive speculative mania in altcoins. No broad participation. No sustained rotation out of Bitcoin.
Instead, capital flowed the opposite way.
- Altcoins bled into Bitcoin.
- Then Bitcoin began bleeding into stocks.
- Then stocks started losing ground to gold.
That progression tells a much bigger story about the global economy.
The Liquidity Problem Nobody Wanted to Hear About
At the center of this “crypto bloodbath” is liquidity.
Liquidity is basically how easy money is to access in the financial system. When central banks keep policy loose and money flows freely, risk assets thrive. When liquidity tightens, markets become fragile.
Cowen points to a liquidity risk model built using:
- Policy interest rates
- The Fed funds rate versus the 2-year yield
- Dollar strength
- Central bank balance sheets
- Funding stress indicators
The conclusion is simple but uncomfortable: Liquidity has been tight.
And in tight liquidity environments, markets shift toward safety. Within crypto, that means altcoins bleed into Bitcoin. Across markets, that means risk assets lose ground to safer assets like gold.
This is not new. It happened in 2018 and 2019. The difference is scale. This cycle has simply been a larger version of that environment.
Why the October 10 Liquidation Was So Violent
When the massive liquidation event hit on October 10, 2025, many traders were shocked by how quickly altcoins collapsed.
But Cowen argues the weakness had been building for years.
The advanced-decline index for the top 100 cryptocurrencies has been trending down since 2021. Underneath the surface, fewer and fewer altcoins were participating in the rally.
Liquidity in altcoins was already thin.
So when Bitcoin finally rolled over and the broader market cracked, there was no cushion. The structure was fragile. Once stress hit, it collapsed fast.
That is what a tight liquidity regime does. It creates narrow leadership and hides weakness until it suddenly cannot be hidden anymore.
Why There Was No Altseason This Time
In 2020 and 2021, altcoins exploded higher. But that happened under extremely loose monetary policy conditions.
Interest rates were low. Liquidity was abundant. Risk appetite was strong. This cycle has been the opposite.
Even though quantitative tightening slowed at times, overall conditions remained restrictive. The Fed funds rate stayed above the 2-year yield. The dollar remained firm. Liquidity never entered a truly loose regime.
Without loose liquidity, sustained altseason is unlikely.
Cowen warns that simply watching M2 money supply is not enough. Broader net liquidity conditions matter more than surface-level metrics.
Is Crypto Doomed?
Here is where perspective matters. Tight liquidity does not automatically mean crypto is finished. It means leadership narrows. In tight environments, a few strong assets can hold up the market while the rest struggle. That is what Bitcoin did for much of this cycle.
But for a broad altcoin resurgence, liquidity likely needs to shift dramatically.
Historically, that shift happens during or after economic stress. Recessions or crises often force central banks to loosen policy again. When liquidity becomes very loose, higher-risk assets tend to outperform.
That is when expanded leadership returns. That is when altcoins historically shine.
What Comes Next?
The variable to watch is liquidity risk.
If the dollar strengthens sharply again, liquidity could remain tight and pressure risk assets further. If economic stress forces policy easing and liquidity loosens significantly, that could mark the beginning of the next major rotation.
Cowen suggests the next true altcoin boom may not arrive until a future cycle, possibly 2027 through 2029, under looser monetary conditions.
That does not mean crypto disappears. It means the environment must change before speculative excess returns.
