- Bitcoin’s potential $80K breakout could trigger an altcoin season, driven by market cycles and investor psychology.
- Rising liquidity and younger investors’ preferences signal a likely altcoin boom following Bitcoin’s gains.
As the crypto market waits for a new rise, industry analysts foresee an upcoming altcoin season that will be closely related to the Bitcoin performance. Guest on the Milk Road Show Channel, Jesse Eckel, offered his observations, speculating that once Bitcoin hits the $80,000 mark, an altcoin explosion would start.
Based on past patterns and the larger economic space, he observed that the timing is perfect for a cycle whereby altcoins follow the increasing momentum of Bitcoin.
The Power of Liquidity and the Four-Year Crypto Cycle
Jesse’s main argument was the consistent four-year cycle in cryptocurrencies, a trend noted from the birth of Bitcoin. He remarked:
“Every four years, even if people expect a different outcome, Bitcoin and the crypto market follow almost the same pattern.”
Scheduled to finish in 2025, this cycle fits Bitcoin’s expected surge, a pattern shown in earlier cycles repeatedly. For Jesse and others, this regular cyclical tendency points to a strong market phase just ahead. But his findings are based on the current global liquidity scene as much as they depend on previous trends.
In these cycles, the impact of liquidity has become ever more important. Jesse gestured to a number of significant economic events that are injecting liquidity into the world economy: stimulus initiatives in China and rate reductions in Europe and the United States This flood of money might drive increased demand for assets, including Bitcoin and, finally, other currencies.
“People concentrate on the four-year cycle and Bitcoin halving. But it’s really global liquidity that drives these patterns,” he said. As liquidity moves into digital assets, he thinks the junction of monetary policy with the four-year cycle of cryptocurrency might propel the market upward.
Psychology and the Wealth Effect Drive Altcoin Season
Altcoin season has psychological influence as well. Many times, as Bitcoin rises, prospective investors feeling priced out start looking for less expensive options.
“Everyone wants the asset that feels affordable,” Jesse said, stressing the typical situation whereby investors flock to altcoins that seem to offer equal promise at a lower price point.
Starting with Ethereum and Solana first, this phenomenon drives new market players to smaller coins, then to more recent, less-known initiatives. Eventually, this excitement fuels even more speculative investments, leading to so-called “Ponzi season,” in which high-risk tokens and meme coins see increasing activity.
Furthermore, adding to this dynamic is the “wealth effect” across the decentralized finance (DeFi) ecosystem that follows the increase in Ethereum value. Decentralized companies and wallets holding Ethereum value find themselves with additional buying power when the cryptocurrency appreciates.
In these situations, Jesse said, investors may use platforms like Aave to borrow against their Ethereum and invest in other assets, therefore leveraging it without selling it. This approach raises the value of fewer coins and generates greater liquidity.
“As people use their crypto holdings, they create liquidity that enters the market and can propel other assets into a parabolic rise,” he said, referencing the generally upward cycle brought about by such speculative investment.
External events, notably the launch of a Bitcoin exchange-traded fund (ETF), which has attracted more institutional interest, have often complicated Bitcoin’s four-year cycles in recent years.
Jesse contends, however, that the market will get a strong signal for additional gains after Bitcoin crosses $80,000, therefore driving a larger rise. He mentioned growing interest from both people and companies ready to explore cryptocurrencies once a specific price range is reached. Jesse stated:
“People start looking for what else to invest in when we see a clean break above $80k since they feel like they are missing out.”
Long-Term Bullish Outlook: Debt, Inflation, and Generational Wealth Transfer
Looking ahead, Jesse underlined the long-term elements supporting a continuous bull run for cryptocurrencies, including the extraordinary government debt and the inevitable inflation. He contends that continuous money printing is inevitable given the U.S. national debt of over $36 trillion and past patterns of budget deficits.
This atmosphere will, he thinks, direct more money into assets like Bitcoin free from inflationary pressures. Jesse also highlighted the generational “wealth transfer,” projecting that over the next two decades $79 trillion will go from older to younger generations.
This younger generation, more focused on digital assets, will probably pick crypto over conventional stocks. “The older generation may avoid crypto, but the younger generation is ready to go all-in,” Jesse said.
On the other hand, CNF earlier reported that by the end of October 2024, TRON had recovered transaction supremacy, handling 43% of all major altcoin blockchain transactions. TRON’s October transaction volume hit 230 million thanks to a noticeable increase in usage and a strategic focus on the USDD stablecoin.
