When will BTC and the altcoin market explode?
Let’s start with the post-halving analysis of BTC. Many believe that the post-halving consolidation of BTC is a normal phase and may require patience - BTC has risen 3 times since September, but what kind of market trend may it have in the coming months?
We are currently in a 15-week consolidation and down 13% from the highs.
After rising nearly 2x from recent lows in January, this decline was to be expected.
While this stage may feel frustrating and boring, it is a natural part of the process.
Volatility is low for several reasons:
Summer is a period of stagnation
Uncertainty about ETH ETF
No clear narrative
However, it is often during these challenging times that staying bullish is most rewarding, for the following reasons:
From a technical perspective, the current cycle is very similar to the bull runs of 2017 and 2021.
Now we are in the accumulation phase:
Lasted ≈4 months in 2016
2020, lasted ≈5 months
Once the accumulation phase is broken out, a parabolic move usually occurs.
At this point, you may feel that the bull cycle is over and the market is being bombarded with negative news:
Germany sells $3 billion worth of BTC
BTC ETF outflows $900 million
These negative factors will make everyone doubt the market
Let’s try to zoom out to understand the current situation in the market and identify the key indicators and bullish narratives to watch:
Federal Reserve Balance Sheet
The chart is bottoming out after nearly two years of decline, and when the Fed injects liquidity, it buys assets, adding them to its balance, and vice versa.
Balance increases: Fed purchases assets, increases liquidity
Balances fall: Fed sells assets, removes liquidity
To understand how this works, let’s look at the Stablecoin Index, which shows new capital entering the crypto market. Right now, our liquidity is not even close to what it was in the last cycle. More liquidity = more opportunities = more risk appetite!
Let’s look at how venture capital firms funded projects during the last bull market.
Historically, the most funding occurred in 2021, at the peak of the cycle (~$13 billion per quarter). Currently, investment amounts are 3-4 times lower. Even as BTC hits new highs, the market has not reached the peak of hype. When it peaks, we will see investment amounts hit new highs.
Another way to observe this correlation is to monitor the global net liquidity index, which brings together the assets of major central banks and Federal Reserve reserves. Currently, global liquidity is consolidating, but things may change soon.
Large countries like Canada and Switzerland have already cut interest rates, and the trend is clear, so the United States will soon follow suit.
Rate cut => Money printing starts => More money pours into TradFi => More money flows into risky assets (cryptocurrencies)
Another narrative is the November 2024 US election.
Cryptocurrency is now a big part of politics, especially in the Trump vs. Biden campaign, with Trump even saying he would end Biden’s war on cryptocurrencies, and such strong support from the U.S. government is a huge boost for the entire market.
Let’s talk about altcoins and try to figure out when the altcoin season will start.
If you are an altcoin holder: don’t sell now, this could be your biggest mistake in this cycle.
Here are the key factors that could drive altcoins higher soon. Let’s wait and see how the altcoin season unfolds.
1. BTC Dominance
It represents BTC’s market cap as a percentage of the total cryptocurrency market cap, and since April this dominance has formed a range between 53.9% and 57%. Once dominance starts to decline and falls below this range, it will be an excellent signal of an upcoming altcoin season.
2.ETH ETF is about to be approved.
While the exact date remains a mystery, rumors suggest approval could come as early as July. Such a milestone could clarify altcoin trends and pave the way for more ETFs.
3. SOL ETF is expected to be the next
3iQ Corporation has applied to launch a spot SOL-ETF in Canada, with the ticker QSOL. The company’s assets are valued at approximately $1 billion. Canada already had spot ETFs for BTC and ETH before the U.S. had futures ETFs for both assets.
A similar situation occurred in the previous cycle. During the COVID-19 pandemic, we saw BTC fall by 63% and many altcoins fall by 80%. This pain point became the best entry point for most tokens.
in conclusion:
Although there is still a lot of uncertainty, altcoins may surprise the market in the second half of 2024. Although many people say that the bull run is over, I believe holding is the best strategy at this point.
Key Takeaways:
Stay put when volatility is low, remember the bullish narrative:
SEC cryptocurrency chief steps down
ETH ETF Launched
Trump's Support for Cryptocurrencies
Rate cuts
Enjoy the good news, there will be more surprises this year.
