6 hours ago
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TLDR:
- Altcoin dominance shows bullish divergence similar to prior crypto bull cycles.
- Crypto market cap eyes breakout above $3.44T as support holds at $3T.
- Fed liquidity shift may boost dollar strength, briefly limiting crypto upside.
- Analysts expect mid-cap altcoins to outperform if macro and technicals align.
Altcoins are showing signs of another potential rally, echoing patterns seen during previous crypto bull cycles.
Analysts suggest these smaller-cap digital assets may be entering a phase of renewed dominance. While total market cap ranges within key levels, a breakout could set the stage for all-time highs.
At the same time, shifting liquidity from the Federal Reserve hints at macroeconomic shifts that could influence price behavior. Investors are now watching on-chain and macro signals as the next alt-season appears to be forming.
Altcoin Dominance Shows Consistent Cycle Behavior
Crypto analyst Javon Marks noted that altcoin dominance has followed a repeatable trend across cycles. In 2017, higher lows formed the basis for the breakout.
In 2021, it was a hidden bullish divergence. Now, a regular bullish divergence appears to be taking shape. He explained that such setups often precede strong market surges.
As seen in previous cycles, this early strength in altcoins tends to build momentum before explosive rallies.
Altcoins, by dominance, have shown a fairly consistent structure each cycle first breaking out, then confirming some form of a bullish pattern before surging massively to new highs.
2017 – Higher Lows
2021 – Hidden Bullish Divergence
Current – Regular Bullish Divergence
Based… pic.twitter.com/lAElDOo881
— JAVON⚡️MARKS (@JavonTM1) July 6, 2025
The market currently reflects the early phase of this shift. Historical patterns show that altcoin dominance builds gradually before accelerating rapidly. This setup has renewed investor interest in mid-cap and emerging tokens.
Market watcher Daan Crypto Trades pointed out that the overall crypto market cap, referred to as $TOTAL, has rebounded but remains in a defined range. The $3 trillion mark holds as the immediate support, with resistance standing near $3.44 trillion.
A break above that upper level could confirm a fresh bullish structure.
According to Daan, if the market clears that resistance, a new leg higher becomes likely. This would not only support major coins but also open space for altcoins to lead.
A clean breakout could mark the formal beginning of the long-awaited next crypto bull phase.
Liquidity Shift May Boost the Dollar
While technical indicators point bullish for crypto, macro liquidity trends suggest caution.
According to market analyst Tomas, Federal Reserve liquidity, which had been rising since January 2025, is now facing downward pressure. This change stems from a recent debt ceiling agreement. The agreement allows the U.S. Treasury to issue more debt to rebuild the Treasury General Account (TGA).
📉 Federal Reserve Liquidity set to fall
The Fed liquidity "upswing" that began on January 1 2025 is now over.
The US Government had previously been draining the Treasury General Account (liquidity injection).
But a new debt ceiling agreement was reached last week ($5 trillion… pic.twitter.com/F67FWlUiOT
— Tomas (@TomasOnMarkets) July 6, 2025
Refilling the TGA could pull about $500 billion from the financial system. Although this drains liquidity from the market, some injections may come from remaining reverse repo funds.
Tomas noted this shift may push the U.S. dollar higher, which historically slows crypto momentum.
Despite concerns over tightening liquidity, the crypto market remains within range. A breakout above $3.44 trillion could override short-term headwinds and drive prices higher.
Analysts see bullish signals in market structure and altcoin dominance trends. With patterns repeating and technical setups aligning, market participants remain alert for a decisive move.
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