Altcoins are dead?..."Bottom signal turned on after 21% oversold"

▲ Altcoins ©

An analysis suggests that the altcoin market is at a critical turning point to break free from the long-term contraction that has continued since 2022. It is argued that the extreme price structure, characterized by the end of quantitative tightening (QT), expansion of the Purchasing Managers' Index (PMI), and a 21% drop compared to the 20-week moving average, resembles three past market bottoms.

Dan Gambardello, host of the cryptocurrency YouTube channel Crypto Capital Venture, analyzed in a video uploaded on July 9 (local time) that the long-term weakness of altcoins is not simply a cryptocurrency market cycle but a result of quantitative tightening and economic cycles. Gambardello explained that "the end of quantitative tightening in July 2019 marked the bottom of altcoin dominance decline," and that even after the end of quantitative tightening in December 2025, altcoin dominance rose from its low point and PMI moved in an expansionary direction. He asserted, "The period that suppressed altcoins is not ending, but has ended."

Gambardello's own risk model is also a key basis for his bullish outlook. The long-term risk score for altcoin market capitalization, applying data since 2013, registered 10. In the past, with the same score, the price was higher three months later 85% of the time, and 100% higher one year later. While Gambardello drew a line, stating that these figures are not indicators for predicting future prices, he said that considering PMI expansion, institutional interest in altcoins, and US cryptocurrency market structure legislation together, "the opportunities for altcoins are astonishing."

In terms of technical structure, the divergence between the 20-week moving average and the 50-week moving average drew attention. Currently, the 20-week moving average has fallen below the 50-week moving average, creating a significant gap. Gambardello analyzed that the same structure appeared at market bottoms in 2022-2023, 2018-2019, and 2015. Altcoin market capitalization is approximately 21% below the 20-week moving average, close to the 23% drop observed at the 2022 low. He stated, "Looking at this indicator alone, a bottom may have already formed," but did not confirm the bottom.

An additional downside scenario was also presented. During the correction after the end of quantitative tightening in 2019, altcoin market capitalization fell by 36% compared to the 20-week moving average. Applying the same magnitude, the current altcoin market capitalization of approximately $879 billion could drop to about $685 billion. Gambardello emphasized that if market conditions worsen, one should prepare for the $650 billion to $700 billion range, clarifying that this is a comparison to check the downside risk range, not an assertion that the 2019 movement will be exactly repeated.

Gambardello explained that altcoin market capitalization is below the 200-week moving average, and the same structure was observed at major lows in 2018, 2019, 2020, and 2023. Keeping open both the possibility of further decline and the formation of a bottom at current levels, he stated, "My goal is to be prepared for any scenario and to take positions now while managing risk tolerance levels," adding, "It has been a very tough cycle, but if risks are managed in a balanced way, I believe it's an incredible opportunity."

[Article Key Summary]

-Dan Gambardello argued that the end of quantitative tightening in December 2025 and PMI expansion are key signals that have changed the long-term bearish environment for altcoins.

-At an altcoin risk score of 10, the price increase ratio three months later was 85% in the past, and 100% one year later, with a current drop of approximately 21% compared to the 20-week moving average.

-While the possibility of altcoin market capitalization reaching $650 billion to $700 billion was also presented in case of further correction, Gambardello assessed the current range as a long-term opportunity under risk management.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*