September 2025 Altcoin Rally: Big Winners, Many Stagnant Portfolios
September 2025 Altcoin Season – Data from TradingView shows that the TOTAL3 market cap (excluding BTC and ETH) surpassed $1.1 trillion in September, signaling a strong rally in altcoins. However, the OTHERS segment (excluding the top 10 altcoins) has shrunk to just 8%, reflecting concentrated capital flow. While top-performing coins like SOL, XRP, BNB, DOG, HYPE, and LINK absorb most liquidity, smaller altcoins struggle to regain previous price levels.
Analyst The DeFi Investor highlighted that retail portfolios often include 25–30 tokens, diluting potential gains. “A 100x token making up only 1% of your portfolio won’t move the needle. Focusing on a few high-conviction bets is more effective than overdiversifying,” the analyst explained.
Altcoin Index Climbs, But Fear Persists
The Altcoin Season Index from Blockchain Center now sits at 80 points, showing that over 80% of the top 50 altcoins outperformed Bitcoin in the past 90 days. Yet the Fear & Greed Index remains neutral at 52, reflecting cautious investor sentiment. Historical trends show that previous rallies, like in 2024, pushed both indices to extreme greed levels above 80, fueled by strong capital rotation into altcoins.
Retail caution stems from lessons learned in prior cycles, including rapid FOMO-driven spikes and crashes, combined with new uncertainties like Fed rate decisions, tax impacts, and geopolitical tensions, according to analyst Luca.
Token Explosion Makes Altcoin Selection Harder
Although TOTAL3 is near its 2021 peak, the number of tracked altcoins has grown tenfold, with over 21 million tokens in 2025 compared to roughly 20,000 in 2021. Analysts, including Nonzee, warn that this oversupply makes finding a high-performing small-cap token extremely challenging. Most new tokens fail quickly due to low liquidity, rug pulls, or fierce competition, leaving retail investors with modest gains or losses, even amid a broader market rally.
The September 2025 altcoin season is vibrant yet selective, emphasizing the importance of fundamental research and careful project selection for investors navigating an increasingly crowded market.
