Is Altcoin Season Off the Table? Crypto Analyst Breaks Down the Real Reason

Jakarta, Pintu News – Crypto analyst Dan Gambardello has responded to claims that altcoin season will not happen this cycle. The claim is based on the increase in the number of tokens, from 1,300 cryptocurrencies in 2017 to more than 36 million today.

However, Gambardello pointed out data that only about 1,300 to 2,000 tokens currently have significant trading volume. In the video uploaded on Gambardello’s X account, the end of the quantitative tightening policy in December 2025 is also discussed.

Altcoin Season: Token Amount Argument Fails to Face Trade Volume Data

The narrative that altcoin season is unlikely is based on the claim that there are 36 million tokens competing for liquidity. Several posts on platform X show the growth in the number of cryptocurrencies, from 1,300 in 2017 to 100,000 in 2021, and now reaching 36 million.

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However, user James Bull disputes that narrative with data showing that there are currently around 1,300 cryptocurrencies that record a daily trading volume above $1 million.

The 2017 crypto market cycle also showed similar figures for such volume thresholds. Meanwhile, the rankings outside the top 2,000 show daily volumes below $200,000, which makes those assets irrelevant for capital absorption.

Gambardello emphasized that most tokens are indeed irrelevant in the context of market cycles. The number of symbols or tickers has never been a determinant of an altcoin’s seasonal characteristics.

Decisive are liquidity availability, macroeconomic conditions and investor behavior. The concentration of trading volume remains centered on 1,300 to 2,000 liquid assets in each cycle.

End of Quantitative Tightening Changes Liquidity Dynamics

According to the latest data, money market funds in the United States reached a record high of $7 trillion. Total assets touched $7.52 trillion, while retail loans exceeded $3 trillion. Institutional holdings surpassed $4.48 trillion, also a historic high.

Historically, fund flows from the money market have often shifted to stocks, small company stocks, the tech sector, and crypto markets.

Dan Gambardello highlighted that the end of the quantitative tightening (QT) policy, which is expected to occur in December 2025, is an important moment. Chart analysis shows that during the two and a half years of QT, the market went through a consolidation phase.

For the first time since the previous expansion, the business cycle and liquidity cycle are expected to reverse direction simultaneously.

The end of QT marks a change in liquidity direction rather than direct price action. Historically, altcoins have tended to respond positively to shifts from tightening to expanding policies.

An analyst named Wyckoff Architect noted that the market rally from 2023 to the first quarter of 2024 occurred precisely in the midst of QT conditions – when interest rates were high and balance sheets were shrinking.

The post predicted that the next rally could be five times stronger than the one in 2023-2024, provided market conditions are favorable. Data from previous cycles shows that after QT ended, Bitcoin’s (BTC) dominance briefly peaked before declining for more than a year.

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PMI Expansion Aligns with Altcoin Season Surge

Analysis of the Purchasing Managers Index (PMI) shows a consistent pattern across various market cycles. Every major spike in altcoins always occurs when the PMI exits the contraction phase and enters the expansion phase.

The current PMI data shows that the indicator has been in a state of contraction for years, with bottom formation signaling a potential reversal. The PMI’s current position is right in the zone that, in previous cycles, has been the starting point for a shift towards expansion.

The historical correlation between business cycle expansion and crypto bull markets is clear from the data. Entering the PMI expansion phase has always preceded major altcoin season rallies in the past.

And Gambardello maintained an optimistic outlook based on macroeconomic conditions, although he also acknowledged market uncertainties.

Bitcoin Dominance Pattern Shows Potential Rotation

Bitcoin’s dominance peaked when quantitative tightening ended in the previous cycle. After that peak, BTC dominance declined for more than a year, coinciding with the market distribution phase.

Currently, Bitcoin’s dominance is in the same zone as previous cycles, with a similar macro backdrop. Since May 2025, BTC’s dominance dropped from 63% to 59%, showing early signs of a shift.

Altcoin season never occurs when Bitcoin’s dominance trend is rising sharply. Instead, altcoins always rally at the peak of BTC’s dominance distribution, not in the accumulation phase.

Market risk models differentiate between price and position performance based on risk adjustment. Some altcoins may underperform Bitcoin in price, but their risk metrics show a favorable setup.

The combination of QT ending, $7 trillion in unspent money market funds, Bitcoin’s dominance in the historical reversal zone, and PMI entering the expansion phase creates ideal conditions for a potential altcoin season.

Investors are advised to prepare for the best and worst case scenarios by managing their risk positions accordingly. Rejecting the altcoin season narrative simply because of the large number of tokens ignores the liquidity and business conditions that have historically fueled previous rallies.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Coinrepublic. ‘No Altcoin Season Coming!’ Crypto Analyst Reveals the Real Reason. Accessed on November 28, 2025