Waiting For The Flood

What Altcoins Need To Truly Pump

May 01, 2025

IN TODAY’S REPORT

What I cover: TECHNICAL ANALYSIS Edition. The Bottom 90% starved for liquidity.

The Bottom 90%

For the most part, the crypto market has recovered nicely off the recent lows, Bitcoin in particular. And altcoins? The majority have improved, but alt season it ain’t.

Today I discuss what I’ll be looking for as a potential spark for the next alt season.

Showing the Total Market Cap excluding Top 10 Dominance, the scale on the right side of today’s chart shows “8.08%”, indicating that after you ditch the top ten cryptos and the overwhelmingly large market cap percentage they represent, all that's left is a paltry 8.08%. Said another way, the thousands upon thousands of altcoins only amount to just over 8% of all the money invested in crypto.

However you say it, one thing is clear. Bitcoin and its top 10 market cap cohorts have sucked up roughly 92% of the money in crypto.

Much of this dominance is of course driven by Bitcoin alone, the original p2p distributed coin which still holds the strongest narrative in an age of headline government profligacy and debt-burdened fiat money.

From the institutional investment side, the CYA mentality only exacerbates the money-flows-to-the-top dynamic for obvious reasons. It’s harder to get fired for owning Bitcoin than it is for owning Fartcoin. Cover your ass at all costs.

`CRYPTO TOTAL MARKET CAP Excluding Top 10 Dominance (OTHERS.D) with Global Net Liquidity Indicator. Monthly Chart.`

But there’s much to the story. For altcoins to catch fire en masse, more money flowing through the system is needed.

Looking at global net liquidity — an indicator measuring major central bank balance sheets minus a couple U.S. based liquidity drains (Reverse Repo and the Treasury General Account) — we can see that global liquidity has been channeling slightly lower for months.

Prior bull runs in alts have been accompanied by global liquidity trending up, something quite evident from this same chart (2017, 2021). Why? More money in the system means more money seeking a return. When interest rates are falling — something still likely on the horizon — most investors move further out on the risk curve into potential payoff opportunities (i.e., tech stocks, altcoins) and away from safer yield-oriented plays.

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In short: alt season ain’t here ‘cause the money ain’t either. Until liquidity flows pick up and the majors stop hoarding 92% of the pie, the vast majority of altcoins are just sitting at the kids' table begging for scraps.

Want alt fireworks? We need a full-blown liquidity flood, not a leaky faucet.

As the macro world turns, I’m still confident it’s coming.

Until next time…

peace_love_crypto

-DB

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