The crypto market is witnessing a fascinating divergence between Bitcoin and altcoins. While Bitcoin’s momentum appears to be weakening due to renewed selling from long-dormant wallets, analysts are growing increasingly confident that a new altseason could be on the horizon, echoing conditions last seen before the 2021 rally.
According to on-chain analytics platform Glassnode, roughly 62,000 BTC have been moved from long-inactive addresses since mid-October, creating a surge in available supply. This sudden reactivation has introduced new resistance levels, limiting Bitcoin’s ability to break higher. Glassnode noted that the shrinking pool of dormant coins may signal the end of one of Bitcoin’s most supportive trends during this cycle.
The firm explained that “without strong new demand, any upward movement in prices will encounter further resistance.” In previous cycles, periods of supply reactivation have coincided with waning bullish momentum – a similar pattern was observed in January 2024, when over 400,000 BTC left long-term storage, triggering a slowdown in the rally.
Interestingly, while smaller wallets holding between 0.1 and 10 BTC have been consistent net sellers, large whale wallets continue to accumulate. Data shows that whales have expanded their holdings throughout October, suggesting institutional or high-net-worth players may be positioning for long-term strength despite short-term headwinds.
Beyond Bitcoin, market optimism is growing rapidly in the altcoin sector. Traders and analysts are increasingly pointing to macroeconomic catalysts that could ignite a broad-based altcoin surge.
Crypto analyst Crypto Rover compared the current setup to the 2019-2021 cycle, when the Federal Reserve’s transition from balance sheet runoff to Quantitative Easing (QE) triggered a massive rotation into risk assets, sparking a multi-year crypto bull run led by Ethereum and other major altcoins.
The upcoming Federal Open Market Committee (FOMC) meeting is widely expected to mark the end of Quantitative Tightening (QT) and the beginning of a fresh round of QE. This shift would inject significant liquidity into global markets, coinciding with forecasts of two additional interest rate cuts by the end of 2025 – one in October and another in December.
Data from prediction platforms Kalshi and Polymarket show that traders are overwhelmingly betting on a 25-basis-point rate reduction at both meetings. The Fed’s total assets as a share of nominal GDP have already fallen to 21.6% – their lowest since 2020 – suggesting that policymakers may soon pivot toward re-expansion.
On the technical side, several signals reinforce the altseason narrative. Analysts have noted that Bitcoin dominance – the ratio of Bitcoin’s market capitalization to the total crypto market – is showing signs of breaking below a multi-year rising support line.
A confirmed breakdown would historically indicate a capital rotation from Bitcoin into altcoins. Similar moves preceded major rallies in 2017 and 2021, when capital flowed aggressively toward mid- and small-cap assets.
Meanwhile, the total altcoin market cap is displaying fractal patterns resembling those seen before prior explosive bull runs. Technical traders view this as a sign that the market structure is compressing before a potential breakout.
However, not everyone is convinced that the rally will continue. Analyst Ali Martinez has warned that Bitcoin might have already completed its bull market cycle. According to his analysis, in previous cycles, Bitcoin reached its peak exactly 1,064 days after the bear market bottom.
If this timing repeats, the current market top may already be in, given that 1,064 days have passed since the November 2022 bottom leading up to Bitcoin’s all-time high of around $126,220. Martinez suggests that traders should be prepared for the possibility of a cyclical cooldown before the next sustained advance.
For now, the market remains at a crossroads. Dormant Bitcoin selling and cautious sentiment suggest short-term consolidation, but growing liquidity expectations and weakening Bitcoin dominance could be setting the stage for the next major altcoin rally.
