The Ethereum risk model shows a 35 score, indicating no altcoin bull market yet.
Crypto market analyst Dan Gambardello recently examined altcoin consolidation patterns amid rising global liquidity and legislative developments.
The analyst compares current crypto market conditions to August 2020, when altcoins lagged traditional markets before catching up with monetary expansion trends.
Dan Gambardello cites the following quotes from White House crypto czar David Sachs that July has been a pivotal month for the crypto market, with the signing of the Genesis legislation and clarity on its way to the Senate.
Legislative news follows on the heels of Trump’s recent positive remarks about Bitcoin and crypto prices in public appearances.
Despite favorable regulatory steps, crypto prices continue to consolidate as altcoins are still over 200% from all-time highs while the S&P 500 achieves record highs.
This is the same divergence as in August 2020, when the traditional markets reached new highs while the crypto market passed through the trenches of consolidation.
Altcoin frustration nowadays is due to investors expecting 10x, 50x, or 100x gains that have failed to materialize, even as higher low formations in large cryptocurrencies.
Ethereum maintains higher low patterns while trading significantly below previous highs, creating impatience among market participants expecting parabolic moves.
Gambardello noted:
“A lot of people have not gotten their 10x, their 50x, or 100x. There’s some frustration there. However, this is nothing new.”
Pro-crypto legislation combined with anticipated rate cuts creates favorable conditions for digital assets. Seven rate cuts are anticipated for 2026, potentially providing additional monetary stimulus supporting crypto prices.
Gambardello analyzes global M2 liquidity index divergence from current altcoin performance patterns to August 2020, when similar disconnects occurred before major crypto market rallies.
Ethereum currently falls while M2 global liquidity increases, creating the same divergence witnessed during previous consolidation phases.
The M2 global liquidity trend continues moving higher across Ethereum, Cardano, and other major altcoins despite crypto prices declining during the same period.
This divergence captures August 2020 levels when the S&P 500 broke all-time highs while the crypto market struggled to overcome long stretches of consolidation.
Historical data shows that cryptocurrencies did catch up with M2 trends eventually, but not tick-for-tick.
Bitcoin and altcoins tracked overall liquidity trends in their respective times, with Ethereum and Cardano both tracking M2 increases after times of divergence in the last cycle.
Existing market trends point to Cardano having higher lows even in the bearish season, and ADA is poised to initiate a higher low trend as the crypto market lays the ground for the second half of 2025.
This is occurring amidst increased global liquidity that earlier maintained crypto prices in the long term.
Gambardello cites Ethereum’s risk model at 35, which is confirmation that no altcoin bull market has started yet despite persistent consolidation and higher low formations.
The proprietary risk models follow several different data points to determine market positions in the cycle and potential opportunities to exit the crypto markets.
The analyst contrasts the present scenario with previous cycles when risk models reached 90s and 100 levels and prompted users to send email notifications for taking profits.
Such instruments would have provided useful inputs during the last cycle’s movements and would have notified users when crypto prices reached best-selling areas in top cryptocurrencies.
Current altcoin and Bitcoin positioning suggests strong potential for upside if crypto prices begin to hold pace with global M2 liquidity trends.
The risk model framework suggests early-stage conditions similar to pre-bull market conditions preceding major crypto market rallies in previous cycles.
Exit planning tools allow investors to prepare for various scenarios, from 10x-30x moves to complete market failures.
Risk management strategies balance extreme upside potential against downside protection as crypto prices move through current consolidation phases.
Gambardello stated:
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