Cryptocurrency analyst Dan Gambardello highlights a compelling correlation between the US Dollar Index and crypto market cycles, suggesting the next major altcoins rally could mirror the 2017 bull run.
In a detailed video analysis, he points to striking similarities between current dollar movements and patterns seen during Trump’s first inauguration, when crypto markets experienced parabolic growth.
The technical setup draws particular attention to the dollar’s recent behavior, which tracks closely with the 2016-2017 period. With Trump’s upcoming inauguration in January 2025, Gambardello sees potential for history to repeat, as a weakening dollar typically supports risk assets like cryptocurrencies.
Historical dollar patterns and crypto impact
Gambardello analyzes a key chart comparing current US Dollar movements to the 2016-2017 period. During Trump’s first inauguration in January 2017, the dollar topped out after he stated “the dollar is too strong” and expressed concerns about US companies competing with China.
The subsequent dollar weakness helped fuel one of crypto’s strongest bull markets, with both Bitcoin and altcoins seeing parabolic price growth.
The analyst points out how today’s dollar chart closely tracks this historical pattern. Using monthly Bitcoin data, he overlays key market cycles marked by Bitcoin halvings (yellow lines) and periods of declining Bitcoin dominance (purple lines).
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The timing appears particularly relevant – just as in 2017, Bitcoin dominance has recently started falling while the dollar shows signs of potential weakness ahead of Trump’s return to office.
“We are at a mirror image of where we were two cycles ago,” Gambardello explains, noting both the political parallels and market cycle timing. These patterns gain extra weight because the 2017 cycle saw stronger performance than 2021, which he attributes partly to dollar weakness during that period.
Current market setup and future projections for altcoins
The altcoin market structure shows promising similarities to previous cycles. Gambardello notes that while the total altcoin market cap sits just 11% below its all-time high, during the equivalent period in the last cycle, altcoins traded 40-70% below their peak before making dramatic moves higher. This comparison suggests substantial room for growth in the current cycle.
Trump’s potential impact on dollar policy adds another layer to the analysis. While he hasn’t explicitly called the dollar “too strong” as he did in 2017, Gambardello outlines several factors that could lead to dollar weakness under Trump’s policies:
- His focus on trade competitiveness often favors a weaker dollar
- Proposed tariffs might trigger retaliatory measures from other countries, pressuring the dollar
- Trump’s historical preference for lower interest rates to support markets
The technical setup for altcoins mirrors patterns from early 2024, when the market saw strong rallies. Gambardello identifies a key resistance level at the “lower high Fibonacci” area, suggesting the current consolidation below this level could lead to another leg higher, similar to previous breakout patterns.
Trading implications and market outlook
The combination of technical patterns and macro factors creates what Gambardello calls “new data” supporting the bull case. The fourth monthly green candle forms on Bitcoin’s chart while the dollar shows topping signals – a setup that previously led to strong crypto rallies.
For traders watching altcoin markets, these patterns suggest preparing for potential upside moves rather than fearing recent gains marking a top.
Looking at specific price levels, altcoins have reached what Gambardello describes as a “consolidation zone.” Current resistance matches patterns from January 2024, when markets briefly paused before breaking higher.
The analyst explains how the 20-day and 50-day moving averages are consolidating in a way that often precedes major moves – specifically, watching for the 20-day average to cross above the 50-day, which could signal the next leg up.
Gambardello emphasizes patience during this setup phase. While short-term dips might trigger market fear, the larger pattern suggests a consolidation period rather than a trend reversal. He draws parallels to early 2024, when similar consolidation periods led to sustained rallies.
