In the cryptocurrency market, anticipation for the altcoin season continues, with analysts suggesting it may occur in the future. Key factors influencing this trend are tied to the actions of the US Fed and current market conditions.
Fed Keeps Interest Rates Unchanged
The US Federal Reserve has decided not to lower interest rates for the fourth consecutive time, keeping rates at 4.25%–4.50%. One reason for this decision is the continued high inflation, which currently stands at 2.8%, while the Fed aims for this figure to be around 2%. This means no fresh money is being pumped into the market, making it difficult for altcoins to experience significant growth.
Altcoins in Accumulation Phase
Currently, the altcoin market is in what is known as the 'accumulation phase.' Prices are not crashing, but they are not soaring either; many coins are trading sideways. This quiet period is often when savvy investors build their positions. Altcoins require two things to trigger a significant rally: a drop in Bitcoin dominance and a return of market liquidity, which could come from cuts in interest rates or increased money supply.
Altcoin Season Isn’t Canceled — Just Delayed
One of the major triggers for the upcoming altcoin rally will be a reduction in interest rates by the Fed, which could happen later this year. This would unlock more money and liquidity into the market. Additionally, the Altcoin Index has just confirmed entry into the famous 4-Year Cycle Zone, a pattern that led to massive altcoin rallies in both 2017 and 2021.
Thus, under the current conditions, the altcoin season is still possible, but its realization depends on the Fed's political decisions and the state of market liquidity. Investors continue to watch these factors closely.