On-chain analyst Willy Woo has identified the massive, sustained crypto liquidations by the FTX bankruptcy estate as the primary structural reason for the broad underperformance of altcoins relative to Bitcoin in the current market cycle. Woo argues that billions in forced selling created a persistent headwind that suppressed altcoin/Bitcoin ratios across the board.
Woo's thesis, published through his Woobull platform and covered by PANews, centers on a straightforward mechanism: the bankrupt exchange held concentrated positions in dozens of tokens. Liquidating these holdings into thin altcoin markets created steady sell pressure that Bitcoin, with its far deeper liquidity, largely absorbed without the same drag. A U.S. Bankruptcy Court approved a liquidation plan allowing the FTX estate to sell up to approximately $200 million per week in crypto assets, with Galaxy Digital appointed to manage the sales.
This liquidation process has stretched from late 2022 through 2025, covering almost the entire current market cycle. Unlike a one-time shock, this created a prolonged, steady drain on altcoin liquidity during what should have been a recovery phase. While many altcoins posted gains in absolute terms, they gained less than Bitcoin, and most failed to reclaim their previous cycle peaks when priced in BTC—a divergence from historical bull market behavior where altcoins typically outperform Bitcoin later in rallies.
The market data supports this divergence. Bitcoin dominance, which tracks BTC's share of total crypto market capitalization, rose from roughly 40% at the start of 2023 to above 55% by early 2025, a move of more than 15 percentage points representing a massive capital rotation away from altcoins. Other factors contributing to Bitcoin's relative strength include the launch of spot Bitcoin ETFs and growing institutional BTC exposure, exemplified by companies like MetaPlanet announcing Bitcoin-focused offerings.
The forward-looking question is the impact once FTX selling ends. If Woo's thesis is correct, the completion of FTX-related asset sales would remove a concrete source of structural sell pressure from altcoin markets. However, this does not guarantee an altcoin rally, as macroeconomic conditions, regulatory developments, and individual project fundamentals also drive performance. The market will watch the liquidation timeline as a concrete, observable event with a definable endpoint, unlike vague "alt season" narratives.
