The crypto market, ex-Bitcoin, is heating up. It is currently holding firm just under $1.14 trillion, a level that previously served as resistance. Positive shifts in Federal Reserve asset liquidity, coupled with historical trends, suggest altcoins could be gearing up for a significant surge.
Perhaps most notably, the 4-week change in the Fed’s assets is nearing positive territory for the first time since 2022. In some ways, this is healthy – in the past, altcoins have typically led market rallies when liquidity returns, showcasing a rotation of capital. Bitcoin has stabilized between key support at $30,000 and heavy resistance at $65,000. This environment is a breeding ground for capital to speculate on altcoins.
Optimistic market analysts predict that the total altcoin market capitalization could eventually climb as high as $15 trillion by the top of this cycle. July of yesteryear has historically shaped up to be one of the stronger months for altcoins, averaging 35% gains. Unlike most gains, these have come in tandem with booming trading volumes and a decline in Bitcoin’s dominance.
Yet the current market setup is almost a perfect replica of the conditions we saw back in late 2020. At the time, a $1.4 trillion stimulus package came before a historic 600% increase in the altcoin market. Heat to this optimistic view, and it’s possible the unfolding U.S. election cycle offers complementary support for this market sentiment. Additionally, a record $3.3 trillion U.S. spending bill was just signed into law, which could pump even more liquidity into the market.
Several altcoins are showing promise. About AethirCloud ($ATH) Aethir is supercharging the future of Artificial Intelligence and Machine Learning with its GPU-as-a-service platform. Virtuals Protocol ($VIRTUAL), now retailing at $0.63, aims to connect the metaverse to real world applications. Synthetix ($SNX) powers a platform to trade synthetic assets, providing traders deep liquidity on any asset.
