BONK, a new meme coin, has been surging right now, spearheading the charge of a possible altcoin season rally. This increase takes place in the context of important economic changes. Specifically, the U.S. has only recently signed into law a $3.3 trillion spending bill, and the Federal Reserve’s liquidity measures may soon go positive for the first time in two years. The crypto market outside of Bitcoin has been stabilizing below the $1.14 trillion level. This consolidation is likely to set the stage for an altcoin explosion.
At the time of writing, BONK is up 11%, which indicates the start of a strong bullish momentum. On the technical charts, there are strong signs of a breakout revival, lifting investor optimism. This meme coin’s price action has been a microcosm of the entire market. Altcoins are riding high on the recent wave of liquidity combined with good economic news—all viable factors.
The recently passed $3.3 trillion U.S. coronavirus spending bill is about to pump trillions of dollars into the economy. This wave in turn may accelerate activity on the crypto market. Historically whenever government increases spending, we see higher investment in non-correlated assets, such as cryptocurrencies. This fiscal stimulus might be the spark for an altseason, pushing prices to new highs.
The Federal Reserve’s liquidity is about to go positive – that is, it’s about to start sucking liquidity out of the monetary system. Greater liquidity pushes more money into riskier asset classes such as altcoins, due to investors looking for yield and going up the risk curve during a low-rate environment. This shift in liquidity conditions could further accelerate the impact of the spending bill, centering the positive sentiment in an altcoin-friendly environment.
BONK’s price action analysis favors bullish outlooks. The meme coin’s technical resurgence is already a strong indication that it may once again lead the pack during an altcoin rally. Speculators are waiting at the sidelines, watching these signals very closely, expecting a huge parabolic rally to produce huge profits.
The crypto market is holding steady just under $1.14 trillion, not counting Bitcoin, suggesting a solid platform for additional bullishness. With the market sentiment turning bullish, altcoins could be set to explode. Given positive macroeconomic trends, they will more than likely surpass being held back by resistance levels and make big-time moves. This fiscal stimulus combined with massive liquidity is making a dangerous cocktail. Additionally, bullish technical indicators point to an optimistic future for the altcoin market.
