The overall sentiment in the current cryptocurrency market remains weak, with trading volumes staying at low levels, and many traders' attention has shifted to traditional assets like gold and oil. However, beneath the surface calm, some key changes are gradually becoming apparent. Bitcoin has fallen for five consecutive months, which is historically rare, and such trends often appear before stage-based rebounds. At the same time, the total market value of altcoins has also retreated to a range that historically often precedes a rebound. Although our altcoin model has not officially turned bullish, the number of tokens standing above the 30-day moving average and passing momentum screening has clearly increased. As stablecoin funds flow back into the market, overall liquidity conditions are continuously improving, and these signs collectively point to a potential market turning window that may be forming.

Historically Rare Consecutive Declines: Bitcoin's Potential Bottom is Being Constructed

From historical experience, Bitcoin often experiences stage-based rebounds after three consecutive months of decline during bear markets, while continuous declines lasting four to six months without any recovery are rarer. The current market is in such an extreme sequence, which also increases the probability of a contrarian recovery in the short term.

At the same time, the valuation position of the altcoin sector has also entered a range that is historically more likely to experience periodic rebounds. When the total market value of altcoins deviates around 30% from the 90-day moving average, the market often enters an overall bottoming phase, following which Bitcoin and the altcoin sector usually experience sustained recovery. Currently, although trading volumes remain sluggish, the price structure of some altcoins has begun to improve, and Bitcoin is also building a potential stage bottom near $66,000. If the price can hold above the current support range and gradually break through key resistance levels, the market recovery process is expected to continue.

Simultaneous Improvement in Momentum and Liquidity: Market Participation Begins to Expand

Although the overall performance of altcoins in this cycle has been weak, some structural changes are emerging. An increasing number of altcoins are reclaiming the 30-day moving average and starting to outperform Bitcoin at certain stages, which is typically an early signal of overall market momentum improvement. At the same time, the number of altcoins selected through quantitative momentum screening has significantly increased, with some assets simultaneously exhibiting conditions of momentum improvement and fundamental catalysts.

More importantly, the market funding environment is also changing. The previously dominant pattern of liquidation and fund outflows is gradually shifting towards capital inflow. The expansion of stablecoin liquidity is one important signal. In the past month, Circle's USDC alone recorded a net inflow of approximately $8 billion, indicating that new funds are re-entering the cryptocurrency market. As liquidity gradually improves, the probability of funds reallocating to Bitcoin and Ethereum is also rising, which will provide support for a broader market.

Overall, the current cryptocurrency market trading remains light, but several key conditions are gradually forming. After experiencing a historically rare period of consecutive monthly declines, Bitcoin seems to be constructing a potential bottom; the return of stablecoin funds is also improving the market liquidity environment. Meanwhile, the breadth of the altcoin market is beginning to expand, with more and more tokens reclaiming the 30-day momentum threshold. Although our altcoin model has not officially shifted to bullish, the number of trading setups that meet the screening criteria has risen to the highest level in months. If Bitcoin confirms a trend breakout above critical levels, the probability of a stage-based rebound in the broader market will further increase.

Some of the above views are sourced from Matrix on Target, Contact Us to obtain the complete report from Matrix on Target.

Disclaimer: The market has risks, and investment should be cautious. This article does not constitute investment advice. Trading in digital assets can have significant risks and volatility. Investment decisions should be made after carefully considering personal circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.

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