Key Insights:
- Crypto analyst debunks “no altcoin season” narrative based on token supply figures.
- Only 1,300 cryptocurrencies maintain over $1 million in daily trading volume.
- Bitcoin dominance falls from 63% to 59% mirroring previous cycle patterns.
Cryptocurrency analyst Dan Gambardello addressed claims that altcoin season cannot occur this cycle. The argument centers on token supply expansion from 1,300 cryptocurrencies in 2017 to over 36 million today.
Gambardello presented data showing that only 1,300 to 2,000 tokens currently maintain meaningful trading volume.
The video published on Gambardello’s X post looks into quantitative tightening ending in December 2025.
Altcoin Season: Token Supply Arguments Fail Against Volume Data
The narrative claiming no altcoin season is possible cites 36 million tokens competing for liquidity. Posts on X show cryptocurrency count growth from 1,300 in 2017 to 100,000 in 2021 and 36 million today.
User James Bull provided counterargument data showing 1,300 cryptocurrencies currently maintain over $1 million in daily trading volume.
The 2017 cycle featured identical volume threshold counts. Once rankings extend beyond 2,000 tokens, daily volume drops below $200,000, making assets irrelevant for capital extraction.
Gambardello stressed that the vast majority of tokens lack relevance for market cycles. The number of tickers never defined the altcoin season characteristics.
Liquidity availability, macro conditions, and investor behavior determined previous cycles. Volume concentration remains in the same 1,300 to 2,000 liquid assets across cycles.
Quantitative Tightening End Shifts Liquidity Dynamics
A record $7 trillion sits in United States money market funds, according to recent data. Total assets reached $7.52 trillion, with retail loans exceeding $3 trillion.
Institutional holdings surpass $4.48 trillion, marking historical highs. Historical patterns show flows entering equities, small caps, technology stocks, and cryptocurrency markets.
Gambardello highlighted quantitative tightening ending in December 2025 as critical timing. Chart analysis shows two and a half years of consolidation during the QT period.
The business cycle and liquidity cycle begin turning simultaneously for the first time since the previous expansion.
QT ending means direction of liquidity change rather than immediate price action. Altcoins historically respond positively to the shift from tightening to expansion.
Analyst Wyckoff Architect stated the 2023 to Q1 2024 rally happened during quantitative tightening. The move happened under high interest rates and balance sheet shrinkage.
The post estimates the next rally could prove five times stronger than the 2023-2024 performance when conditions align properly.
Previous cycle data shows QT ended, followed by Bitcoin dominance peaking and then falling for over one year.
PMI Expansion Aligns With Altcoin Season Breakouts
Purchasing Managers Index analysis reveals consistent patterns across cycles. Every major altcoin breakout aligned with PMI leaving contraction and entering expansion.
Current PMI data shows years of contraction with a bottoming formation. The indicator sits at exact zones where previous cycles flipped into the expansion phase.
The historical correlation between business cycle expansion and cryptocurrency bull markets appears clear in the data. PMI entering the expansion phase preceded previous altcoin season rallies.
Gambardello maintains bullish positioning based on the macro setup while acknowledging uncertainty.
Bitcoin Dominance Patterns Signal Rotation Potential
Bitcoin dominance peaked when quantitative tightening ended in the previous cycle. Dominance fell for over one year following the peak during the distribution phase.
Current dominance sits near the same zone with an identical macro backdrop developing. The metric dropped from 63% to 59% since May 2025, showing early divergence.
Altcoin season periods never happened during strong Bitcoin dominance uptrends, but rather at distribution tops.
Risk models distinguish between price performance and risk-adjusted positioning. Certain altcoin prices underperformed Bitcoin while risk metrics showed favorable setups.
The combination of ending quantitative tightening, $7 trillion in idle money markets, Bitcoin dominance at historical turns, and PMI expansion creates the setup.
Investors must prepare for best- and worst-case scenarios while managing individual risk positions. Altcoin season narrative dismissals based solely on token count ignore liquidity cycles and business conditions that decided previous rallies.