Farzam's Market Take: Why Altcoins Are Lagging Behind Bitcoin in Risk-Off Environment

The cryptocurrency market continued to face headwinds as investors reassess risk exposure in the face of mounting macro uncertainty. Bitcoin has retreated to $84,440 with a weekly decline of 6.61%, while Ether slipped to $2,750. More notably, altcoins have borne the brunt of the selling pressure, with Solana down 7.96% over seven days, XRP dropping 8.54%, and Cardano sliding 9.73% during the same period. This widening gap between Bitcoin and altcoin performance reflects a familiar market dynamic during periods of elevated uncertainty.

Macro Headwinds Trigger Flight to Safety

Recent tariff tensions between the United States and Europe—reignited by comments from President Donald Trump regarding Greenland—have unsettled global markets and sparked a broader risk-off rotation. Capital has been flowing away from speculative assets and cryptocurrencies, gravitating instead toward traditional safe-haven instruments. Gold and silver have benefited from this shift, posting sharp rallies even as equity indices showed relative resilience. The U.S. Treasury yield surge has compounded the pressure on risk assets, tightening financial conditions and weighing particularly heavily on high-beta positions like cryptocurrencies.

Farzam Ehsani: Crypto Is Behaving Like a High-Risk Asset, Not a Hedge

According to Farzam Ehsani, co-founder and CEO of crypto exchange VALR, the latest market dynamics underscore a crucial distinction in how capital is treating digital assets. “Capital is rotating into established safe havens, while crypto continues to trade as a high-beta risk asset,” Farzam explained. This observation highlights the challenge facing the crypto market: despite aspirations to function as a hedge or uncorrelated asset, cryptocurrencies continue to behave more like speculative risk assets that attract flow-sensitive traders. Farzam’s perspective suggests that Bitcoin may struggle to find sustained support without clearer macroeconomic tailwinds or renewed institutional interest.

Why Altcoins Suffer More Than Bitcoin

The divergence in performance between Bitcoin and altcoins is particularly striking. While Bitcoin has managed to defend key psychological support levels, smaller tokens have proven far more vulnerable to the risk-off environment. This reflects the market’s natural tendency to consolidate capital into the largest, most liquid asset—Bitcoin—when sentiment turns cautious, or to exit crypto markets entirely in search of safer alternatives. Analysts point out that this pattern emerges consistently during periods of macro uncertainty, as Bitcoin’s dominance tends to increase during market stress.

Derivatives Data Suggests Caution Ahead

Positioning across derivatives markets indicates that traders remain defensive as they approach the midyear period. Leverage appetite has cooled substantially, with market participants evidently reluctant to place aggressive directional bets. This defensive stance suggests the market is waiting for a clearer catalyst before committing fresh capital—whether that takes the form of renewed institutional inflows, easing inflation data, clearer signals of future interest rate cuts, or a de-escalation of geopolitical tensions. For now, crypto prices remain locked in a constrained range, with Bitcoin holding key support levels but altcoins continuing to show relative weakness and vulnerability to risk sentiment shifts.