TLDR:

The ALT/BTC ratio bottomed in Q4 2025 after a four-year decline with RSI at historic oversold levels.
Russell 2000 breakout in Q4 2025 mirrors patterns that preceded 2017 and 2021 altcoin rallies.
Market cycle delayed by one year due to Fed balance sheet contraction and tight liquidity in 2024.
Current setup combines technical breakout signals with improving macro liquidity and risk appetite.

Altseason 2026 may finally materialize as multiple technical and macroeconomic indicators converge. 

Crypto analyst Bull Theory recently outlined a compelling case based on historical cycle patterns. The analysis points to ALT/BTC bottoming in Q4 2025 after nearly four years of decline. 

Market conditions now mirror setups that preceded major altcoin rallies in 2017 and 2021. These developments suggest the delayed cycle could activate in the coming quarters.

Historical Patterns Show Consistent Altcoin Cycle Structure

The altcoin market has followed predictable patterns during previous bull cycles. Both the 2017 and 2021 altcoin rallies began after ALT/BTC established a bottom and broke its downtrend. 

In Q4 2016, this ratio bottomed before altcoins surged throughout Q1-Q2 2017. The same sequence repeated in Q4 2020, leading to the 2021 alt season.

The current market structure shows striking similarities to these historical setups. ALT/BTC has declined for nearly four years and appears to have bottomed in Q4 2025. 

Technical indicators support this view, with RSI reaching historically oversold levels. Additionally, the MACD indicator turned green after 21 months of bearish readings.

The analysis from Bull Theory emphasizes these technical formations as precursors to trend reversals. Market participants who studied previous cycles recognize the current configuration. 

However, the breakout confirmation remains pending as the ratio tests critical resistance levels. This cautious optimism reflects lessons learned from premature calls in 2024.

Macro Conditions and Risk Appetite Support Altcoin Thesis

Beyond crypto-specific metrics, broader market indicators reinforce the altseason 2026 narrative. The Russell 2000 index, which measures small-cap equity performance, broke above previous all-time highs in Q4 2025. 

This index historically serves as a proxy for risk appetite among investors. Both the 2017 and 2021 altcoin runs followed Russell 2000 breakouts by several months.

The timing delay compared to earlier expectations has rational explanations. Federal Reserve balance sheet contraction continued through most of 2024 and early 2025. 

Tight liquidity conditions suppressed risk asset performance across all markets. These headwinds only began easing toward the end of 2025.

This one-year delay in the cycle does not invalidate the overall framework. Instead, the pattern remains intact but shifted forward temporally. 

Current conditions show improving liquidity, potential regulatory clarity, and renewed risk appetite. Bull Theory notes that when these elements previously aligned, altcoins typically outperformed Bitcoin substantially. 

The analysis stops short of guaranteeing outcomes but presents a data-driven case for increased probability.

The post Altseason 2026 Analysis: Historical Patterns and Market Indicators Point to Potential Rally appeared first on Blockonomi.

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Filed under: Bitcoin - @ January 5, 2026 8:24 pm