Has crypto-taureau passed? What holds the Altcoin rally?

The political scenario in the United States has moved to the cryptocurrency industry when Donald Trump won the presidential election Last November. As expected, the Trump administration introduced several Policies supporting crypto. Since November 5, 2024, the Bitcoin market has increased by 21.93%. However, Altcoins have not seen the same level of earnings.

Altcoins has trouble following

While Bitcoin experienced strong gains, the Altcoin market increased only by 14% in the same period. In the past 12 months, the main altcoins have had trouble:

• Ethereum is down 53.8%
• Solara dropped by 17.1%
• Cardano is down 6.7%
• Mastiff decreased by 1.6%

With altcoins dragging behind, it’s time to analyze why they are lagging behind and when a potential rally could occur.

Factors that could stimulate altcoins

Several key factors could stimulate a turnaround for the Altcoin market:

• Trump’s Pro-Crypto position – Administration continues to deploy Crypto user -friendly policies, which could possibly support altcoins.
• Next Lance of ETF Spot – FNB Solana, XRP and Litecoin Spot should be launched soon, which could increase market interest.
• Impact of pricing policy – Trump’s recent price hikes on China, Canada and Mexico can influence the feeling of the market.
• Recession fears – The United States knowing two consecutive quarters of the negative growth of GDP under Biden, economic uncertainty could affect the behavior of investors.

Tight liquidity is the real problem

Despite these potential catalysts, the Crypto Virtualbacon analyst maintains that none of these factors is responsible for stagnating the Altcoin market. Instead, it highlights close liquidity conditions in the United States as a main reason.

According to Virtualbacon, three major factors are liquidity liquidity:

1. Quantitative tightening of the Fed (QT)

The American federal reserve reduces its assessment instead of injecting money into the economy. This means that they sell assets or let them mature without reinvesting, effectively removing money from the financial system.

2. Installation of Reversed Repo Edward

The installation of reversed repo, which had previously provided cash reserves to financial institutions, was exhausted. This limits the liquidity available on the larger market.

3. General account of the low American treasury

A declining balance in the general account of the US Treasury means that the government has less money to spend, further reducing cash flow in the system.

The problem of maturity of American debt: Fed may be forced to act

Virtualbacon also underlines a maturity crisis of the imminent debt in 2025. The US government must refinance its debt, but if the liquidity remains tight, there may not be enough buyers. To prevent a funding crisis, the Fed may have to intervene by:

• End of quantitative tightening (QT)
• Inject cash into banks
• Purchase of treasury bills

• Read also:
• American inflation cools faster than expected – what it means for Fed rate cuts and bitcoin
• ,,

When will Altcoins join?

Virtualbacon predicts that if the Fed does not add liquidity to this quarter, the financial system could have serious stress. However, once the liquidity conditions improve, an Altcoin rally with late cycle is likely.

Although the current phase is difficult, investors who position themselves wisely could now see major gains when the market turns.

While Bitcoin appreciates the spotlights, altcoins are quietly built for their turn on stage.