“Will the altcoin season come again? Liquidity is the answer!”

1. The essence of the altcoin season: liquidity determines everything

The explosion of altcoins is often closely related to market liquidity. When liquidity is loose and funds flow into the market, altcoins can experience significant movements. However, there is a sequence for funds entering the market:

1. Liquidity rises → first boosts large-cap stocks (S&P 500)

2. Then affects Bitcoin (BTC) and other mid-cap assets

3. Finally transmits to altcoins (ETH and smaller market cap coins)

This is also why altcoins drop harder than BTC in bear markets but rise more aggressively in bull markets.

2. Current market liquidity analysis

Currently, the Federal Reserve's monetary policy remains unclear, and market liquidity has not significantly increased. Although BTC has broken historical highs, the rise of altcoins has not truly exploded, indicating that large funds are still rotating within mainstream assets and have not yet largely flowed into high-risk assets.

If the Federal Reserve begins to cut interest rates in the future and market liquidity rises, we may finally see the true altcoin season begin!

3. What are the signals of the altcoin season?

1. ETH/BTC ratio continues to rise (indicating funds are flowing from BTC to ETH and altcoins)

2. Bitcoin is consolidating, and altcoins start to outperform BTC

3. Market FOMO sentiment increases, and low market cap coins begin to surge

**Current liquidity has not significantly rebounded, and the altcoin season may still need to wait.** But if the Federal Reserve hints at rate cuts within the year and BTC enters a high consolidation phase while ETH/BTC strengthens, then the altcoin season is coming!

Remember: liquidity determines everything; where the funds are, there the market trend will be!