# Altcoin Market Widespread Weakness ## Overview The altcoin market is experiencing widespread weakness and lack of follow-through, with both analysts attributing this to restrictive monetary policy and the absence of market euphoria that characterized previous bull cycles. ## Current Market Conditions Multiple altcoins are showing significant weakness across the board. Coin Bureau Trading reports Ethereum down from weekly resistance at 4,100, trading below key support levels with potential downside to 3,524 or even 3,364 [uMa_0_YsaYI @ 10:52]. Solana is back at 187-186 levels, with stronger support not appearing until 162 [uMa_0_YsaYI @ 13:00]. XRP is rejecting from resistance around 2.7, trading in a choppy range between 2.25-2.35 with deeper support at 2.00-2.16 [uMa_0_YsaYI @ 13:15]. Even H Bar, which showed relative strength after recent liquidations, failed to break above the critical 0.2215 level and rejected, confirming continued bearishness [uMa_0_YsaYI @ 18:01]. The analyst notes "honestly you guys the way the assets started trading. I was getting very very positive on it" but expresses frustration that altcoins are "not doing the bare minimum right now" [uMa_0_YsaYI @ 16:58]. Overall sentiment is captured by the statement: "everything is dumping" with Anna down almost 8% [uMa_0_YsaYI @ 25:05]. ## Root Cause: Restrictive Monetary Policy Into The Cryptoverse provides the fundamental explanation for altcoin weakness: restrictive monetary policy conditions that differ dramatically from the previous cycle. The Fed cut rates by 25 basis points to the 3.75-4% range, but Chairman Powell was clear that December cuts are "not guaranteed" and policy is "not running on autopilot" [uMa_0_YsaYI @ 01:15]. Additionally, Japan's Bank of Japan kept rates at 0.5% but hinted at potential hikes if wages pick up, causing the yen to push lower and the dollar to explode [uMa_0_YsaYI @ 01:51]. The critical insight is that the Fed funds rate at 4% remains above the 2-year yield at 3.6%, indicating policy is still restrictive [PvDskt21bnI @ 04:08]. Into The Cryptoverse emphasizes that "the market tells the Fed what to do. The Fed does not tell the market what to do" and historically the Federal Reserve follows the 2-year yield [PvDskt21bnI @ 04:40]. ## Absence of Euphoria Both analysts agree that this cycle fundamentally lacks the euphoria that characterized previous bull runs. Into The Cryptoverse states directly: "this cycle, we have not really seen euphoria in the way that we saw in the fourth quarter of 2013 and the fourth quarter of 2017 and the fourth quarter of 2021" [PvDskt21bnI @ 12:21]. This absence is explained by the ongoing restrictive conditions. When the Fed printed $6 trillion and lowered rates to zero in the last cycle, Bitcoin dominance went down as excess liquidity chased riskier assets and higher market cap altcoins outperformed Bitcoin [PvDskt21bnI @ 07:01]. But "when you are in restrictive territory, when quantitative tightening is ongoing" with Fed funds rate above neutral rate, the dynamics completely reverse [PvDskt21bnI @ 07:25]. ## Quantitative Tightening Context The Fed announced that quantitative tightening will end on December 1st [PvDskt21bnI @ 05:43]. However, Into The Cryptoverse notes this phase of QT has lasted much longer than the 2018 cycle, and while ending QT is a form of "balance sheet risk management," it doesn't guarantee an immediate altcoin revival [PvDskt21bnI @ 08:32]. Critically, in 2019 when QT ended, inflation was below 2% and trending down - the opposite of today where inflation is above target and trending up [PvDskt21bnI @ 22:01]. The Fed "risks rekindling the animal spirits in the market" by ending QT with inflation already elevated [PvDskt21bnI @ 23:12]. ## Bitcoin Dominance and Liquidity Flows The market structure shows Bitcoin dominance at elevated levels similar to late 2019, when dominance "exploded higher" as Bitcoin went to new highs while altcoins bled [PvDskt21bnI @ 27:20]. Into The Cryptoverse notes that in 2017, the total2 minus USDT divided by Bitcoin ratio was at the same valuation in late October as today, suggesting potential for further altcoin weakness before any recovery [PvDskt21bnI @ 28:05]. The consensus view is that "if you're going to hold something in crypto, Bitcoin is the best play because dominance will likely go up" [PvDskt21bnI @ 27:48]. Coin Bureau Trading echoes this, noting the need to "be patient" and stick to the bullish bias despite frustration [uMa_0_YsaYI @ 25:30]. ## Trading Implications Coin Bureau Trading advises extreme caution, repeatedly asking "where are you going to put your stop loss?" when considering altcoin longs [uMa_0_YsaYI @ 14:48]. The analyst states "we need more proof. We need more proof over here before we get caught up into anything" [uMa_0_YsaYI @ 17:15]. For most altcoins, the recommendation is to wait for clear daily body closes above key resistance levels before entering positions. Into The Cryptoverse suggests that if Bitcoin cannot move higher by December when QT ends, "it's probably not going to for a while" and the market could enter a slow downward phase through 2026 [PvDskt21bnI @ 26:22]. However, the lack of euphoria means any decline would likely be gradual rather than a massive crash, as crashes require euphoria and low Bitcoin dominance - neither of which currently exist [PvDskt21bnI @ 26:42]. ## Consensus View Both analysts agree that altcoin weakness stems from restrictive monetary policy conditions that differ fundamentally from the previous cycle's liquidity flood. The absence of euphoria, elevated Bitcoin dominance, and ongoing quantitative tightening (until December) create an environment where altcoins lack the follow-through needed for sustained rallies. Patience is required, with liquidity likely continuing to favor Bitcoin over higher-risk altcoins until monetary conditions genuinely ease and market structure shifts.