The decline in altcoin market capitalization has started to slow in the first week of March despite numerous negative geopolitical developments. In addition, the newly released PMI index is reviving hopes that altcoins may recover soon.
However, any recovery could face significant challenges as the proportion of altcoins trading near their all-time lows continues to rise.
Why Could the PMI Report Influence Capital Flows into the Altcoin Market?
A positive macroeconomic signal has just emerged, bringing renewed optimism. The US ISM Manufacturing PMI has remained above the 50 threshold for two consecutive months.
The ISM Manufacturing PMI reflects survey results from purchasing managers about their business conditions. It helps assess whether the US manufacturing sector is expanding or contracting.
Specifically, the February 2026 PMI reached 52.4. Although it came in slightly lower than January’s 52.6, it still exceeded the forecast of 51.8.
Historical data shows that when the ISM PMI rises above 50—indicating economic expansion—it often coincides with strong rallies in Bitcoin and altcoins.
Analyst Ash Crypto explained that when PMI exceeds 50, the US economy enters an expansion phase. Corporate profits increase. Household income improves.
Consumer spending accelerates. Investor risk appetite strengthens.
“If ISM stays above 50 for a few more months, the crypto winter could be over soon,” Ash Crypto stated.
Analysts expect that the ISM Manufacturing PMI remaining above 50 for two consecutive months signals the beginning of a new US business cycle. This environment creates favorable conditions for capital to flow into high-risk assets such as cryptocurrencies.
Analyst Matthew Hyland combined PMI data with historical models and indicated that altcoin dominance has just confirmed a breakout signal.
The rising PMI, together with the recovery of the monthly MACD-H indicator and the breakout from a falling wedge pattern in altcoin dominance, suggests a potential altcoin season scenario in 2026.
38% of Altcoins Are Trading Near All-Time Lows
A recent report by CryptoQuant analysts reflects a still-bleak outlook for altcoins.
Darkfost, an analyst at CryptoQuant, stated that approximately 38% of altcoins are trading near their all-time lows. This marks the lowest level in the current cycle and appears even worse than the period immediately following the collapse of FTX.
“This chart perfectly illustrates the current situation for altcoins. Investors remain cautious and continue to lose interest in altcoins,” Darkfost explained.
However, he added that severely deteriorating conditions can also create an environment where opportunities begin to emerge.
A recent report by BeInCrypto highlighted additional signals in March that suggest altcoins could recover. However, the excessive number of altcoins combined with tight liquidity conditions may limit the extent of any rebound.