Market sentiment turns bullish — is a rally season approaching?

Author: Crypto Nova

Translation: TechFlow

Bull market incoming! The season of one-way rallies isn’t far away.

We’re about to enter the second phase (i.e., the parabolic phase) of this bull market, which will push our altcoins to new highs!

Let me walk you through the latest developments.

If this is your first market cycle, you may have been worn out by the intense market corrections over the past three months.

Looking back at my first cycle, after seeing my altcoins drop more than 50% following Bitcoin’s halving, I thought it was all over.

I was completely wrong.

This post will cover:

1. Healthy correction in the crypto market

2. The 90-day “dead zone” after halving

3. Reduced selling pressure in Q3

4. Increased buying pressure in Q4

5. How our altcoins will skyrocket

Let’s go step by step.

1. Healthy Correction in the Crypto Market

No asset can keep rising without pullbacks. Corrections are healthy—they lay the foundation for a strong bull market.

In every cycle, $BTC gets rejected multiple times at its previous all-time high before finally breaking through strongly.

But why?

Traditional investors sell, new investors buy.

During this process, $BTC shifts from weak hands to strong hands. This is a very bullish signal!

Investors who bought Bitcoin in the $50k–$60k range won’t sell at $73k. They’ll hold their BTC longer, aiming for substantial profits.

Recently, whales have been buying heavily!

In July, whales purchased $4 billion worth of $BTC at the fastest pace since April 2023.

And it’s only mid-month!

As a result, $BTC supply on exchanges continues to decline.

Eventually, once buying pressure returns to the market, this will trigger a supply shock that most people severely underestimate (more on this later).

First, let’s add more bullish catalysts!

2. The 90-Day “Dead Zone” After Halving Is Ending

History doesn’t repeat itself, but it rhymes!

Historically, Bitcoin and the entire crypto market always face significant corrections around the time of the Bitcoin halving event.

This period is also known as the re-accumulation phase, during which BTC changes hands (as mentioned above: traditional investors sell, new investors buy).

On average, the post-halving “dead zone” lasts about 90 days. We’ve already passed 85 days.

But it gets better...

3. Reduced Selling Pressure in Q3!

Markets work very simply. An asset’s price is determined by supply and demand.

More buyers than sellers? –> Price goes up.

More sellers than buyers? –> Price goes down.

In Q2, BTC faced massive selling pressure.

Who sold BTC in Q2 and caused my positions to drop?

• Bitcoin mining companies

• Grayscale and BTC ETFs

• German government

• Mt. Gox fear, uncertainty, and doubt (FUD) intensifying

These events collectively led to significant selling pressure on BTC. And altcoins always follow Bitcoin’s lead.

Good news: selling pressure is easing.

• Grayscale’s outflows have slowed significantly

• The German government has no more BTC left

• Bitcoin miners have almost completed their selling

• Mt. Gox will refund creditors slowly in Q3—not a sudden dump as many feared…

There will still be some selling pressure in Q3,

but not nearly as much as in Q2. Once the market absorbs these BTC sales and sellers dry up, prices will stabilize.

But reduced selling pressure alone isn’t enough to lift our positions. We also need buying pressure—and we’ll get that in Q4.

4. Increased Buying Pressure in Q4

Who will drive our positions higher?

• U.S. elections

• U.S. interest rate cuts

• Bankrupt exchange FTX refunding customers

This is extremely important, so let’s break it down. The U.S. market is the dominant player in the crypto industry.

Therefore, dynamics in the U.S. market and changes in crypto policy will have a major impact on the entire industry.

In 2024, we’re witnessing dramatic changes that even seasoned crypto insiders didn’t anticipate.

Crypto has become a key issue in the U.S. election.

Trump calls himself the “crypto president,” and the Biden administration quickly shifted from anti-crypto to pro-crypto after seeing Trump’s success with crypto-friendly policies.

Both parties are now competing for crypto voters. Outlook looks positive!

The U.S. election will take place in November 2024.

As Election Day approaches, competition between the two parties to win over crypto voters will intensify.

This will raise awareness of crypto among all U.S. citizens and global observers following the election.

They will attract more retail investors into the market.

Let’s look at the data!

With U.S. inflation cooling, the likelihood of rate cuts is increasing. The Fed has a 94.4% probability of cutting rates in September.

Rate cuts = rising prices for risk assets

After each rate cut, holding cash in bank accounts becomes less attractive because bank interest rates will decrease.

The wealthy will rebalance their portfolios and increase allocations to risk assets—including cryptocurrencies.

This will boost liquidity in risk markets such as crypto.

So far, so good. But it gets even better.

One special factor will significantly increase buying pressure in Q4.

That is, FTX will begin refunding customers in Q4!

Quick recap of what happened:

FTX was one of the largest cryptocurrency exchanges in the U.S. during the 2021 bull market. However, the exchange engaged in fraud, resulting in billions of dollars in customer fund losses in 2022.

In Q4, FTX will distribute $16 billion in cash to its customers.

Why is this bullish?

Because most FTX users are die-hard crypto supporters. It’s highly likely that most of the funds will flow back into the crypto ecosystem.

This could generate massive buying pressure.

5. Incoming Capital Will Skyrocket Our Altcoin Prices!

Let’s revisit this chart. What do you see? Can you spot any patterns?

Exactly!

We’re getting closer and closer to the second phase of this bull market—the exponential growth phase.

Once Bitcoin breaks out and makes new highs, it will bring our altcoins along for the ride!

It’s just simple market dynamics.

Buying pressure > Selling pressure = Rising prices

To sum up: reduced selling pressure in Q3, increased buying pressure in Q4, so...

Just a little more patience, and our altcoin prices will soar.

The only question left to ask is,

Are you ready?