After four months of persistent downtrend, the crypto market is showing signs of a potential trend reversal. Technical analysis reveals a shift in momentum, with many assets upgrading their trend ratings to “Uptrend” in recent days. Breakouts from classic reversal patterns—such as the Falling Wedge and Channel Down—have emerged, and several cryptocurrencies, including Bitcoin (BTC), have reclaimed their 200-day simple moving average (SMA), a widely-watched bullish indicator.

altFINS CEO, Richard Fetyko spoke about this topic in X Spaces. Listen to the recording.

Bitcoin Leads the Way

As always, BTC sets the tone for the entire crypto market. Dominating over 65% of the total crypto market cap—and climbing—Bitcoin has cemented its role as the bellwether for crypto investor sentiment. Notably, this dominance has increased throughout the year as altcoins saw significant declines (40–70%) while BTC managed a modest 7% year-to-date (YTD) gain. However, Bitcoin’s dominance is now nearing its historical peak of 71%, which often precedes a shift in capital toward altcoins—a phenomenon known as “altcoin season.”

Why Is BTC Outperforming?

BTC’s relative strength comes from several tailwinds:

• Spot ETF Inflows:Since April 25, the 12 U.S.-listed Bitcoin spot ETFs have collectively seen over $5 billion in net inflows. This surge of institutional demand validates Bitcoin’s role as a maturing asset class.
• Stablecoin Minting:The growing supply of stablecoins—typically a signal of new capital entering the crypto ecosystem—suggests that investors are gearing up to deploy funds, often starting with BTC.
• “Digital Gold” Narrative:Bitcoin is increasingly viewed as a hedge against inflation, mirroring the performance of gold, which is up 30% YTD. The idea of BTC as an uncorrelated, store-of-value asset is resonating in today’s macroeconomic climate.

Regulatory and Institutional Tailwinds

Longer-term positive developments are also shaping up on the regulatory and institutional fronts:

• The SEC has softened its stance, dropping lawsuits and clarifying that meme coins are not considered securities.
• Major financial institutions like Charles Schwab and Morgan Stanley (E-Trade) plan to offer crypto within the next year.
• Several U.S. states are advancing pro-Bitcoin legislation. Notably, New Hampshire passed a “Strategic Bitcoin Reserve” bill, with states like Arizona, Illinois, Maryland, Michigan, and Texas exploring similar initiatives.

Bitcoin has been officially recognized as part of strategic reserves in some jurisdictions.

More spot ETF filings are in progress for altcoins like LTC, XRP, HBAR, and SOL.

A Look Toward 2025

Speculation continues to swirl about crypto’s future trajectory. Binance founder CZ has projected that BTC could reach between $500,000 and $1 million during this cycle, with the overall crypto market cap potentially touching $5 trillion by 2025.

Meanwhile, the DeFi space is undergoing a transformation—featuring innovations such as token buybacks and revenue-sharing mechanisms—that may provide additional tailwinds as investor confidence returns.

Bottom Line:

While it’s still early to declare a full-fledged bull market, the recent technical breakouts, increasing institutional adoption, and macro tailwinds suggest more than just a bear market rally. The next few weeks will be crucial in confirming the sustainability of this momentum—and whether the crypto market is ready for its next major leg up.