A growing number of market analysts believe the long-awaited altcoin season may finally arrive in January 2026, with new data suggesting a shift in liquidity conditions.
According to Bull Theory, the OTHERS dominance chart, which tracks the market share of altcoins excluding Bitcoin and Ethereum, is hovering near the same base zone seen ahead of previous explosive cycles in 2017 and 2020.
The MACD on OTHERS dominance is flattening, while the RSI sits near historical lows. In past cycles, similar setups preceded multi-year expansions in altcoin dominance, suggesting the current environment reflects accumulation rather than excess.
The current setup aligns with a historical pattern in which altcoins bottom first, then outperform as liquidity conditions improve.
In late 2019, when the Federal Reserve ended quantitative tightening and began purchasing $60 billion in T-bills monthly, altcoin dominance bottomed and trended higher through early 2022.
Over the past four years, altcoins underperformed despite Bitcoin’s recovery, mainly because liquidity was being drained. But analysts believe things are now changing, since the Fed has resumed liquidity injections, with roughly $40 billion per month in T-bill purchases.
Markets are also forward-looking. Discussions around corporate tax cuts, potential $2,000 dividend-style checks, and the prospect of a more growth-focused Fed Chair are strengthening expectations for additional liquidity.
Moreso, small-cap equities are confirming this shift, with the Russell 2000 recently hitting new highs. This move historically precedes stronger altcoin performance.
Despite these signals, current sentiment remains muted. CoinMarketCap’s Altcoin Season Index is at 19 out of 100, firmly in Bitcoin season territory and well below its yearly high of 78.
On the bright side, assets like ASTE, ZEC, and MERL posted triple-digit gains over the past 90 days.
Bull Theory argues that altcoins are likely near a long-term bottom versus Bitcoin. In a base scenario, OTHERS’ dominance returning to 12-13% could fuel a solid altcoin cycle.
In a stronger liquidity-driven case, a move toward 18-20% in 2026 could mark the largest altcoin season to date.
Source: https://zycrypto.com/altseason-scheduled-for-january-prominent-analyst-makes-bullish-call-for-eth-xrp-sol-ada-shib/
