cryptoliquidity

We might be standing at the edge of something significant in the cryptocurrency market, and the signals are worth paying close attention to. After years of altcoins struggling while Bitcoin climbed, patterns are emerging that suggest a major shift could be on the horizon.

Reading the Historical Patterns
When you examine the OTHERS dominance chart – which tracks the market share of altcoins excluding the top cryptocurrencies – something fascinating becomes clear. This metric has repeatedly shown us where altcoins find their floor before explosive growth phases begin.
Currently, OTHERS dominance sits near the same foundational levels where it bottomed during two previous cycles: before the remarkable 2017 rally and again before the 2021 surge. The technical indicators paint an intriguing picture as well. The MACD is flattening out, and the RSI has dropped into territory historically associated with major bottoms. These aren't random occurrences – they've preceded significant multi-year expansions in altcoin market share before.
What this tells us is simple but powerful: altcoins appear much closer to a floor than a ceiling right now.

The Liquidity Connection Nobody's Talking About
Here's where things get really interesting. Let's rewind to September 2019. The Federal Reserve announced it would stop its quantitative tightening program. Around that exact time, OTHERS dominance found its bottom. By October 2019, the Fed began purchasing $60 billion monthly in Treasury bills. This gradually evolved into comprehensive monetary expansion by March 2020.
What happened next? Altcoins began a sustained upward trend that didn't peak until early 2022 – precisely when the Fed signaled it would tighten policy again.
Now contrast that with the past four years. Altcoins have struggled or declined, even as Bitcoin recovered strongly from its lows. The explanation isn't complicated: the Fed was withdrawing liquidity from the system, and altcoins always feel this pain first and hardest.

Why This Time Is Different
The landscape is shifting beneath our feet. The Fed has already begun reintroducing liquidity into the financial system. Treasury bill purchases have started again at roughly $40 billion monthly. While this doesn't constitute full-scale monetary expansion yet, the liquidity tap has clearly been turned back on.
Markets have a tendency to look forward, not backward. Right now, they're anticipating several major liquidity catalysts:
Corporate tax reduction proposals are being discussed, which would enhance corporate earnings and potentially lift asset prices across the board. There's talk of direct payments to citizens – another form of liquidity injection. A new Federal Reserve leadership transition is expected, with markets anticipating a more growth-oriented policy stance.

The Rate Cut Puzzle
The official projections show only one or two interest rate cuts ahead. But here's what's worth noting: Powell previously indicated no rate cuts would happen in December, yet they did. This happened because underlying economic conditions remain weaker than headlines suggest. If the economy were truly robust, the Fed wouldn't be purchasing Treasury bills at all right now.
This matters enormously for altcoins because they're incredibly sensitive to liquidity conditions.
Another telling sign: the Russell 2000 index – which tracks smaller companies – recently hit new highs. Small-cap assets typically move first when liquidity expectations improve, serving as an early warning system for broader market shifts.

Putting the Pieces Together
When you step back and look at the complete picture, several conclusions emerge:
Altcoins are trading near their long-term support levels relative to the broader market. Liquidity conditions have begun shifting from restrictive to supportive. Markets are pricing in additional liquidity ahead, not less.
This convergence suggests something significant: altcoins may be approaching a bottom relative to Bitcoin, and the real sustained rally could kick off in 2026 rather than sooner. Similar to previous cycles, we might witness substantial appreciation over the following 6-12 months as economic conditions evolve.

What Could This Actually Look Like?
In a moderate scenario, OTHERS dominance could climb back to the 12-13% range, delivering a solid altcoin season. But in a more bullish scenario, if OTHERS dominance jumps toward 18-20% during 2026, we could witness the most significant altcoin rally in cryptocurrency history.
During such a phase, something unusual tends to happen: altcoins outperform Bitcoin during rallies and decline less during corrections. This occurs because improving liquidity conditions provide a supportive cushion.

Beyond the Hype Cycle
This analysis isn't about following the latest trend or mechanically applying the "four-year cycle" theory. It's about understanding liquidity flows – and liquidity has historically found its way to altcoins with remarkable consistency during expansionary periods.
The setup we're seeing today bears striking similarities to conditions that preceded previous major altcoin rallies. While past performance never guarantees future results, the fundamental driver – liquidity – appears to be moving in the same direction it did before those historical runs.
For those watching the cryptocurrency market, the coming months could provide crucial confirmation or contradiction of this thesis. Either way, understanding these liquidity dynamics offers a framework for making sense of price movements that often seem random but may follow deeper patterns.
The market always has surprises in store, but right now, the liquidity blueprint suggests altcoins deserve a closer look than they've warranted in years.
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