Matrixport Research: After five consecutive months of decline in Bitcoin, the conditions for a market rebound are gradually taking shape

The overall sentiment in the current cryptocurrency market remains weak, with trading volume maintaining low levels, and many traders have shifted their attention to traditional assets like gold and oil. However, beneath the surface calm, some key changes are gradually emerging. Bitcoin has fallen for five consecutive months, which is relatively rare in history, and such trends often appear before a phase of rebound. Meanwhile, the total market capitalization of altcoins has also retreated to a range that has historically seen the initiation of rebounds. Although our altcoin model has not officially turned bullish, the number of tokens that have regained the 30-day moving average and passed momentum screening has significantly increased. With stablecoin funds flowing back into the market, overall liquidity conditions are continuously improving, and these signs collectively point to a potential market turning window that may be forming.

Rare Historical Consecutive Declines: Bitcoin's Potential Bottom is Being Built

Historically, Bitcoin often experiences a phase of rebound after three consecutive months of decline during a bear market, while a continuous decline lasting four to six months without recovery is relatively rare. The current market is in such an extreme sequence, which also increases the probability of a counter-trend recovery in the short term.

At the same time, the valuation position of the altcoin sector has also entered a range where cyclical rebounds are more likely to occur historically. When the total market capitalization of altcoins deviates from the 90-day moving average by about 30%, the market is often in an overall bottoming phase, after which Bitcoin and the altcoin sector usually see sustained recovery. Although trading volume remains sluggish, the price structure of some altcoins has begun to improve, and Bitcoin is currently building a potential phase bottom near $66,000. If the price can hold the current support range and gradually break through key resistance levels, the market recovery process is expected to continue.

Momentum and Liquidity Improving Simultaneously: Market Participation is Starting to Expand

Although the overall performance of altcoins in this cycle has been weak, some structural changes are emerging. An increasing number of altcoins have regained the 30-day moving average and have begun to outperform Bitcoin in phases, which is usually an early signal of overall market momentum improvement. At the same time, the number of altcoins selected through quantitative momentum screening has significantly increased, with some targets simultaneously exhibiting conditions for momentum improvement and fundamental catalysts.

More importantly, the market funding environment is also changing. The previous pattern dominated by liquidations and capital outflows is gradually shifting towards capital inflows. The re-expansion of stablecoin liquidity is one of the important signals. In the past month, Circle's USDC alone recorded a net inflow of about $8 billion, indicating that new funds are re-entering the cryptocurrency market. As liquidity gradually improves, the probability of funds being reallocated to Bitcoin and Ethereum is also rising, which will provide support for the broader market.

Overall, the current trading in the cryptocurrency market remains light, but several key conditions are gradually forming. After experiencing a historically rare consecutive monthly decline, Bitcoin seems to be building a potential bottom; the return of stablecoin funds is also improving the market liquidity environment. Meanwhile, the breadth of the altcoin market is beginning to expand, with more and more tokens regaining the 30-day momentum threshold. Although our altcoin model has not officially turned bullish, the trading setups that meet the screening criteria have risen to the highest level in months. If Bitcoin confirms a trend-breaking move above key levels, the probability of a phase rebound in the broader market will further increase.

Some of the views above are from Matrix on Target, contact us to obtain the complete report of Matrix on Target.

Disclaimer: The market carries risks, and investment should be cautious. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.