The crypto market has gone through one of the longest and toughest periods for altcoins. Many investors who have endured this phase are experiencing steep losses, while prices struggle to recover despite strong macro signals. Analyst Michael van de Poppe thinks this exhaustion phase is nearing an end.
According to him, The recent correction after the Federal Reserve’s last meeting has shaken market confidence, but the underlying data shows a shift is coming. The Fed has decided to cut interest rates by 25 basis points and plans to end quantitative tightening on December 1. This move could mean that the tightening phase of the cycle is almost over – a condition that has historically marked the beginning of new bull markets.
The end of the tightening could mark a turning point
In previous cycles, similar changes in monetary policy have led to massive crypto runs. In 2020, when the Fed started cutting interest rates and launching quantitative easing, Bitcoin and altcoins entered a powerful bull phase. On the other hand, the tightening and rate hikes that began in late 2021 gave investors the bear market that they are still feeling today.
This time, circumstances again point to a transition. Inflation is no longer the Fed’s primary concern; employment and economic growth are priorities. Weak labor and business data could force the Fed to make further interest rate cuts. That would boost liquidity and create a favorable environment for risky assets, including cryptocurrencies.
Golden Peaks, Risky Assets Prepare to move
Van de Poppe said gold, often a signal of risk sentiment, recently peaked and fell almost 10 percent. Historically, when gold cools off after a strong run, money starts flowing back into risky assets like stocks and crypto.
Bitcoin remains in a tight range around the $109,000 level, but its valuation compared to assets like gold and copper suggests it is undervalued. Van de Poppe expects this slowdown to disappear as liquidity shifts, potentially pushing Bitcoin towards $150,000-$170,000 in the coming quarters.
With Bitcoin gaining momentum again, altcoins are likely to follow. Many smaller cryptocurrencies are already showing signs of bullish divergence, a pattern that often marks the start of a recovery.
The line-up for the next Alt season
Although the market reaction to the Fed meeting was negative in the short term, the longer-term situation is looking increasingly favorable. The end of quantitative tightening, possible interest rate cuts and a cooling gold market all point to a return to risk-taking.
This combination could mark the first stages of a new cycle. Altcoins, which have been in a deep correction for months, may finally see relief once Bitcoin breaks the key resistance around $112,000.
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