Altcoins Stall as Market Awaits Liquidity Boost and Regulatory Clarity

While many altcoins are still over 200% from their respective all-time highs, altcoins have been consolidating while patience wears thin. This consolidation takes place as the market impatiently awaits a return of global liquidity and regulatory transparency. Industry experts such as Dan Gambardello are keeping a close eye on these developments, indicating that the market resembles the same state observed back in August of 2020.

As Dan Gambardello of Crypto Capital Venture has recently noted, Ethereum’s risk model is right at a 35. This level would indicate that the altcoin market has not fully entered a bull market. He makes comparisons between today’s market and August 2020. At that time, the traditional equity markets experienced an exuberant boom while the crypto market faced a protracted bear market.

"What happens if ethereum and all coins start catching up with global m2? I think we see a bull market." - Dan Gambardello

Global M2 liquidity that once correlated positively with crypto prices has uncoupled from the recent run-up in altcoin prices. Ethereum, Cardano, and other major altcoins experience heightened liquidity even in the presence of price drops – an evolution indicative of previous consolidation periods’ behavior. According to Gambardello, if these altcoins start to track more closely with global M2, we are in for a bullish trend.

Regulatory developments also play a crucial role. The Genesis legislation — meant to offer that clarity — heads to the Senate. While it awaits the President’s signature, the anticipation of that signing is already proving significant to the crypto market.

Further, the expectation of new monetary stimulus is in the works. Seven rate cuts are anticipated for 2026. These cuts would more than offset the bullish support these moves bring for crypto prices.

Most investors aren’t happy with today’s returns.

"A lot of people have not gotten their 10x, their 50x, or 100x. There’s some frustration there. However, this is nothing new." - Dan Gambardello

For Gambardello, exit planning tools are a way for investors to plan for all possible outcomes of their investment, whether that be big wins or a complete bust. He points out that in past cycles, risk models got to much higher levels and led to profit-taking.

At the moment, Cardano is on the verge of making a higher low pattern. The rest of the crypto market is building up the infrastructure and ecosystem that lead into H2 2025.