The crypto market is beginning to display early indications that a new altcoin season could be approaching, as analysts reference historical patterns and technical signals hinting at a rebound after a lengthy slump. Although altcoins have recently lagged behind Bitcoin, bullish factors from data and macroeconomic parallels are building optimism that a change in liquidity conditions might trigger a strong market-wide rally for altcoins.
Altcoin Dominance Hits Record Oversold Levels
According to crypto analyst Javon Marks, altcoin dominance has entered oversold conditions for the first time in history. Marks highlighted in his post that the indicator, which measures the market share of all altcoins, is now the most oversold it’s ever been.
The OTHERS.D chart shows the market dominance percentage of all cryptocurrencies except the top 10 by market capitalization. It is a measure of the combined market share of smaller altcoins and can be used to identify broader altcoin rallies. His long-term chart of the OTEHRS.D movement spans over a decade, with each major low followed by an extended period of recovery and massive market gains.
The chart reveals that dominance has declined sharply since its 2021 peak of around 20%. At the time of writing, the OTHERS.D dominance is around 7%. A wave trend indicator at the bottom of the chart is in deep negative territory around negative 50%, which is its lowest in history.
Marks noted that such oversold conditions often precede strong reversals. It means that selling pressure has been exhausted and that a major rebound could soon begin. If this pattern repeats, altcoins may be entering one of their most attractive accumulation phases in years.
Crypto Total Market Cap Excluding Top 10 Dominance. Source: Javon Marks on X
Fed’s Monetary Shifts And Their Impact On Crypto Liquidity
Another technical perspective came from analyst Ted Pillows, who compared current market conditions to the 2019-2020 cycle when the Federal Reserve ended quantitative tightening (QT) and later resumed quantitative easing (QE). His chart of the crypto total market cap excluding Bitcoin shows a 42% decline following the end of QT in late 2019, followed by an explosive recovery after the Fed initiated QE in March 2020.
Pillows explained that while ending QT may ease financial pressure, it does not directly inject liquidity into the economy, something altcoins need to rally. In contrast, QE or Treasury General Account (TGA) releases flood the market with liquidity and allow inflows into cryptocurrencies.
He noted that ending QT isn’t enough for alts to rally. It is either the Fed starts another QE or the Treasury releases TGA liquidity into the economy. The most feasible option right now is the second one.
Crypto Total Market Cap Excluding BTC. Source: Ted Pillows On X
With the US government currently in a shutdown, he suggested that a TGA-driven liquidity release may occur once the fiscal impasse is resolved, and this will serve as the next major driving force for the altcoin market.
Featured image created with Dall.E, chart from Tradingview.com
