Are Altcoins Quietly Bottoming Before a 2026 Supercycle? Here’s What Data Reveal

TLDR

• OTHERS dominance sits near past cycle lows, signaling altcoins may be forming a long-term structural base.
• Fed liquidity injections through renewed T-bill purchases indicate improving conditions for risk-driven assets.
• Technical signals like a flattening MACD and compressed RSI echo setups seen before major altcoin expansions.
• Analysts say a shift toward higher liquidity could push OTHERS dominance toward 12–20% during a 2026 cycle.

Altcoins are again drawing attention as market analysts debate whether the sector is forming a long-term base ahead of a potential 2026 supercycle. 

Recent market behavior suggests that altcoins may be near a structural low rather than facing more downside. Current readings on the OTHERS dominance chart show the market sitting close to the same zone that preceded previous multi-year expansions in 2017 and 2020. 

Technical indicators such as a flattening MACD and an RSI near historical bottom levels support the view that altcoins may be establishing a foundation before a broader recovery.

The macro backdrop has also shifted in a way that traders consider important. Altcoins have remained under pressure for nearly four years, even as Bitcoin advanced, mainly due to aggressive liquidity withdrawal. 

With the Federal Reserve now injecting liquidity through renewed T-bill purchases, the tone across risk-based markets is changing. This shift has prompted analysts to review whether conditions resemble past windows that triggered extended altcoin cycles.

Liquidity Support Returns as Analysts Track Market Signals

A detailed thread from Bull Theory drew parallels between the current environment and the period that preceded the 2020–2021 altcoin cycle. 

The post referenced September 2019, when the Federal Reserve paused quantitative tightening. Soon after, OTHERS dominance steadied, and by October 2019 the Fed began purchasing $60 billion in T-bills each month. 

Those purchases later expanded into broader balance-sheet growth by March 2020, and altcoins trended higher until early 2022.

Over the last four years, however, the opposite occurred. Liquidity drain weighed on non-major digital assets even during Bitcoin’s climb from cycle lows. 

According to the thread, this trend is reversing. The Fed has resumed liquidity injections at around $40 billion per month, providing support not seen since the previous expansion phase. 

While these purchases are not classified as full quantitative easing, they represent a policy turn that risk-sensitive assets tend to respond to.

Market discussions also include several potential liquidity catalysts. Corporate tax adjustments, consumer-focused stimulus proposals such as a $2,000 payment plan, and speculation around a new Fed Chair with a more growth-oriented stance all factor into forward expectations. 

Traders note that markets often adjust early when liquidity forecasts improve, which may explain why smaller equity indices have already reacted.

Technical Clues Suggest Base Formation in Altcoins

Beyond macro conditions, technical patterns are drawing renewed focus. OTHERS dominance remains near long-term base levels associated with previous altcoin rebounds. 

These zones marked the beginning of extended cycles in the past, and market observers argue that the current formation resembles those earlier stages. The flattening MACD and deeply compressed RSI readings strengthen the case for a maturing bottom.

Bull Theory’s post also pointed to the Russell 2000 index, which recently reached a new high. Small-cap performance has often shifted earlier than large-caps when liquidity conditions start to improve. 

Traders see this as a relevant signal because altcoins historically behave like the crypto market’s small-cap segment, reacting quickly to changes in liquidity expectations.

If these trends continue, analysts expect OTHERS dominance to revisit the 12–13% range during a standard recovery. A stronger environment could push the metric toward 18–20% in 2026, a level associated with broader altcoin leadership. 

During such phases, altcoins tend to outperform Bitcoin and show more resilience during temporary market pullbacks.

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