Altcoins Show Early Signs of Rally as Market Cap Nears Key Levels

Altcoins are exhibiting signs of a potential rally, mirroring patterns observed during previous crypto bull cycles. Analysts suggest that these smaller-cap digital assets may be entering a phase of renewed dominance. The total market cap is currently within key levels, and a breakout could pave the way for new all-time highs.

Crypto analyst Javon Marks noted that altcoin dominance has followed a repeatable trend across cycles. In 2017, higher lows formed the basis for the breakout. In 2021, it was a hidden bullish divergence. Now, a regular bullish divergence appears to be taking shape. Such setups often precede strong market surges. As seen in previous cycles, this early strength in altcoins tends to build momentum before explosive rallies. Altcoins, by dominance, have shown a fairly consistent structure each cycle first breaking out, then confirming some form of a bullish pattern before surging massively to new highs.

The market currently reflects the early phase of this shift. Historical patterns show that altcoin dominance builds gradually before accelerating rapidly. This setup has renewed investor interest in mid-cap and emerging tokens. Market watcher Daan Crypto Trades pointed out that the overall crypto market cap, referred to as $TOTAL, has rebounded but remains in a defined range. The $3 trillion mark holds as the immediate support, with resistance standing near $3.44 trillion. A break above that upper level could confirm a fresh bullish structure. If the market clears that resistance, a new leg higher becomes likely. This would not only support major coins but also open space for altcoins to lead. A clean breakout could mark the formal beginning of the long-awaited next crypto bull phase.

While technical indicators point bullish for crypto, macro liquidity trends suggest caution. Federal Reserve liquidity, which had been rising since January 2025, is now facing downward pressure. This change stems from a recent debt ceiling agreement. The agreement allows the U.S. Treasury to issue more debt to rebuild the Treasury General Account (TGA). Refilling the TGA could pull about $500 billion from the financial system. Although this drains liquidity from the market, some injections may come from remaining reverse repo funds. This shift may push the U.S. dollar higher, which historically slows crypto momentum. Despite concerns over tightening liquidity, the crypto market remains within range. A breakout above $3.44 trillion could override short-term headwinds and drive prices higher.

Analysts see bullish signals in market structure and altcoin dominance trends. With patterns repeating and technical setups aligning, market participants remain alert for a decisive move.