Altcoin Season: Not Ending but Blocked by "Liquidity"... Fed·PMI Rebound Reignites Market Attention

The altcoin market has yet to establish a strong upward trend in this cycle, and investor dissatisfaction is growing. However, some analysts believe that it’s not the “altcoin season” that has failed, but rather that the macro environment needed to trigger it has not yet formed.

Crypto analyst Sykodelic recently pointed out that the core reason for the weakness in the altcoin market is “lack of liquidity.” He explained that compared to Bitcoin, altcoins generally have a higher risk asset profile and tend to surge during periods of abundant liquidity and expanding economic activity.

Altcoin Market, Trapped in a “Liquidity Desert”

Strong altcoin rallies usually occur when three conditions are met simultaneously: increased net liquidity from the Federal Reserve, expansion in manufacturing sector prosperity, and a trend of funds flowing from Bitcoin into altcoins.

During the 2020–2021 cycle, these three factors rose together. The Federal Reserve’s net liquidity surged, PMI was in expansion, and the “OTHERS” index, representing the total market cap of altcoins, exploded from about $100 billion to roughly $600 billion.

However, the current cycle is quite different. Over the past two years, the Federal Reserve’s net liquidity has fluctuated within a range without clear direction, and PMI has remained below 50 for 26 consecutive months, indicating economic contraction. Under this environment, the “altcoin market” has not formed a clear upward trend but has continued to trade sideways.

Is the Altcoin Season Reopening?

Notably, recent developments are beginning to change gradually. Sykodelic believes that the current macro environment has started to meet the conditions needed for an “altcoin expansion.”

First, the Federal Reserve’s net liquidity appears to have bottomed out and shows signs of rebounding. Meanwhile, manufacturing prosperity indicators are also improving.

The ISM Manufacturing PMI rose to 52.6 in January 2026, up 4.7 points from 47.9 the previous month; February’s PMI reached 52.4, exceeding market expectations and remaining in expansion territory.

Analysts suggest that if these positive trends continue, they could create the macro environment that altcoin markets have long anticipated.

The outlook also reflects this expectation. Sykodelic proposed that the “OTHERS” index, representing the total market cap of altcoins, could recover to around $560 billion in the future.

Although Bitcoin still dominates the market trend, if macro indicators truly point toward liquidity expansion, the “altcoin season” might be delayed but eventually triggered. Some interpret the current stagnation as a “preparatory phase” in an ongoing cycle.

Summary by TokenPost.ai

🔎 Market Analysis

The main reason the altcoin market has not shown a strong rally in this cycle is attributed to “lack of liquidity.” In previous strong cycles, increased Federal Reserve liquidity, expanding manufacturing sectors, and fund flows from Bitcoin into altcoins occurred simultaneously. However, over the past two years, Fed liquidity has remained within a range, and PMI has been below 50 for a long time, limiting the upward momentum of the altcoin market.

💡 Strategy Highlights

The direction of the altcoin market depends more on the macro liquidity environment than on individual project performance.

Investors should not only monitor Bitcoin prices but also confirm trends in Fed liquidity and economic indicators like manufacturing PMI.

Recently, PMI has recovered above 50, and Fed liquidity shows signs of rebounding, raising the possibility of altcoin expansion again.

After the market centered on Bitcoin reaches a certain maturity, a “lagging rally” in funds flowing into altcoins may occur.

📘 Terminology Explanation

Federal Reserve Net Liquidity: An indicator showing the level of funds supplied by the U.S. Federal Reserve, reflecting the actual liquidity released into the market.

PMI: An indicator of manufacturing sector expansion; above 50 indicates economic growth, below 50 indicates contraction.

OTHERS Index: Represents the total market cap of major altcoins excluding Bitcoin, used to gauge the overall size of the altcoin market.

Altcoin Season: A market phase where altcoin prices increase significantly more than Bitcoin.

💡 Frequently Asked Questions

Q.

Why has the altcoin market not surged significantly in this cycle?

Analysts believe the main reason is “insufficient market liquidity.” Altcoins are risk assets that typically rise when central bank liquidity expands and economic activity is active. However, in recent years, Fed liquidity has not increased substantially, and manufacturing prosperity indicators have been subdued for a long time, restricting the environment for altcoin rallies.

Q.

Could an altcoin season occur in the future?

Recently, with some macroeconomic indicators improving, this possibility has been raised again. Signs of a rebound in Fed liquidity and PMI above 50 in January and February 2026 suggest a return to expansion. If this trend continues, it could create an environment conducive to fund inflows into the altcoin market.

Q.

What indicators should investors focus on when analyzing the altcoin market?

Rather than just following news or technicals of individual coins, it’s more important to consider macroeconomic indicators. Confirming trends in Fed liquidity, manufacturing PMI, and fund flows from Bitcoin to altcoins can provide a more comprehensive understanding of the potential for altcoin market expansion.

TP AI Notes

This article uses a language model based on TokenPost.ai for summarization. The main content may be omitted or may differ from actual facts.