The overall sentiment in the current crypto market remains weak, with trading volume remaining at low levels. Many traders have shifted their attention to traditional assets such as gold and crude oil. However, beneath the surface calm, some key changes are gradually emerging. Bitcoin has fallen for five consecutive months, which is relatively rare historically, and similar price action often precedes a period of rebound. Meanwhile, the total market capitalization of Altcoin has also fallen back to levels that have historically triggered multiple rebounds. Although our Altcoin model has not yet officially turned bullish, the number of tokens that have regained their 30-day moving average and passed momentum screening has increased significantly. With stablecoin funds flowing back into the market, overall liquidity conditions are also continuously improving. These signs collectively point to a potential market turning point.
Historically Rare Consecutive Pullbacks: A Potential Bottom is Forming for Bitcoin
Historically, Bitcoin has typically experienced a rebound after three consecutive months of decline during a bear market, while a sustained decline of four to six months without any recovery is relatively rare. The current market is in such an extreme sequence, which increases the probability of a short-term counter-trend correction.
Meanwhile, the valuation of Altcoin has entered a range historically more prone to cyclical rebounds. When the total market capitalization of Altcoin deviates from its 90-day moving average by about 30%, the market is often in a bottoming phase, followed by a sustained recovery in Bitcoin and the Altcoin sector. Although trading volume remains low, the price structure of some Altcoin has begun to improve, and Bitcoin is forming a potential bottom around $66,000. If the price can hold the current support range and gradually break through key resistance levels, the market recovery process is expected to continue.
Momentum and liquidity are improving in tandem: Market participation is beginning to expand.
Although Altcoin have generally underperformed in this cycle, some structural changes are emerging. More and more Altcoin are regaining their 30-day moving averages and beginning to outperform Bitcoin in the short term, which is usually an early sign of improved overall market momentum. At the same time, the number of Altcoin screened using quantitative momentum analysis has increased significantly, with some of them possessing both momentum improvement and fundamental catalysts.
More importantly, the market funding environment is also changing. The previous pattern dominated by liquidations and capital outflows is gradually shifting towards capital inflows. The renewed expansion of stablecoin liquidity is one important signal. In the past month alone, Circle's USDC recorded a net inflow of approximately $8 billion, indicating that new funds are re-entering the crypto market. As liquidity gradually improves, the probability of funds reallocating to Bitcoin and Ethereum is also increasing, which will provide support for the broader market.
Overall, trading in the crypto market remains subdued, but several key conditions are gradually forming. After a historically rare series of consecutive monthly declines, Bitcoin appears to be forming a potential bottom; the return of stablecoin funds is also improving market liquidity. Meanwhile, the Altcoin market is expanding, with more and more tokens regaining their 30-day momentum levels. While our Altcoin model has not yet officially turned bullish, the trading settings meeting our screening criteria have risen to their highest levels in months. If Bitcoin confirms a trend breakout above key levels, the probability of a broader market rebound will increase further.
The above viewpoints are from Matrix on Target. Contact us to obtain the full Matrix on Target report.
Disclaimer: Investing in the market involves risks; please exercise caution. This article does not constitute investment advice. Digital asset trading can be extremely risky and volatile. Investment decisions should be made after careful consideration of your individual circumstances and consultation with a financial professional. Matrixport is not responsible for any investment decisions made based on the information provided in this content.
