Bitcoin and some major cryptocurrencies are rising, but most altcoins are in decline – a sharp divergence marked by a downward cumulative Accumulation/Distribution (A/D) line for the broader crypto market, even as the top 200 assets maintain growth.
This “K-shaped” market pattern reflects deepening differences between crypto sectors. Winners are racking up profits, while many assets are quietly losing value. The same trend is evident throughout the US economy and traditional markets, highlighting growing polarization.
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Market breadth decreases as capital focuses on leaders
The cryptocurrency market is now seeing performance driven by fewer assets. Analyst Jamie Coutts noted that altcoins have been in a bear market since 2021. The A/D indicator, developed by Marc Chaikin, measures money flow through price and volume. Show this divergence clearly.
Although the A/D line for all cryptocurrencies is declining, the top 200 assets show stable and ascending patterns. This shift suggests that institutional and retail capital is increasingly consolidating into established projects. As a result, chains and applications that lack adoption struggle with supply pressure and reduced incentives.
“Amplitude has been collapsing for years. Fewer assets are doing the work. Most are quietly bleeding away. If a chain or app doesn’t have real adoption, it won’t survive,” Jamie Coutts posted.
These metrics highlight a transformation in the crypto markets. Projects based on narratives and token incentives in the 2021 bull market now face challenges as liquidity shifts towards assets with direct utility. This process clearly distinguishes which projects remain sustainable and which fade under speculation-driven models.
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Defining winners and losers in a K-shaped market
This pattern affects more than just asset classifications. Analyst Taiki Maeda described the recovery as K-shaped. Bitcoin and cryptocurrencies with buyback models form the rising branch, benefiting from scarcity and strong incentives.
Meanwhile, infrastructure tokens with large unlocks and those lacking a value proposition are moving lower. This change indicates market maturity, with users seeking assets based on utility rather than hype. The artificial intelligence sector attracts notable attention from investors and developers, further separating successful projects from the rest.
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The tokenization and real-world asset sectors are also gaining traction. Traditional financial institutions are exploring blockchain solutions and offering use cases that link legacy finance with decentralized technology. Still, most altcoins remain outside these trends and struggle as capital is allocated more selectively.
The A/D indicator remains a powerful tool for spotting trends. Technical analysis guides explain that it tracks where the price closes during each period, making it more reliable than volume-only metrics for identifying actual buying and selling pressure. A rising A/D line indicates accumulation, while a falling line marks distribution. When price and A/D diverge, reversals can occur.
Macro Factors Deepen Crypto Divide
This K-shaped pattern also reflects global macroeconomic trends. In the US, the S&P 500 has risen since 2021, but the consumer sentiment index has fallen, suggesting asset owners are prospering as sentiment weakens.
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“We live in a K-shaped economy. Asset owners continue to accumulate capital while consumer sentiment collapses, meaning the rich economy is booming while the rich economy is struggling,” PolymarketMoney posted.
This environment directly shapes digital assets. Cryptocurrencies are considered stores of value or inflation hedges, attracting capital seeking refuge from currency risk. In contrast, speculative tokens without a clear value face losses as investors demand real utility rather than mere stories.
As sector correlations change, broad altcoin diversification no longer protects portfolios. Investors now prefer concentration on assets with proven fundamentals, a shift from previous cycles in which broad exposure drove gains. Market rotation is accelerating and only solid projects maintain momentum.
By January 2026, the main question for investors is how long this K-shaped divergence will persist. The forces behind this split show little sign of fading. It remains to be seen whether this supports a healthier ecosystem by limiting focus or risks stifling innovation through concentration of resources. Continuous monitoring throughout the year will be crucial for anyone active in these markets.