- Key altcoin market breakout factors are converging: Fed QT end, record sidelined cash, institutional adoption
- JP Morgan projects Fed may signal end of Quantitative Tightening (QT) soon, boosting liquidity
- Altcoin market cap (excluding BTC/stablecoins) holding firm above $1 trillion signals underlying strength
The global altcoin market appears to be approaching a decisive breakout phase as several macroeconomic and policy factors align to support renewed risk appetite. Dan Gambardello, an analyst, suggests that the potential end of the Federal Reserve’s quantitative tightening (QT) cycle, record liquidity levels, and rising institutional adoption could form the perfect mix for a new rally.
The confluence of these factors has created optimism across the digital asset landscape, particularly among investors who have weathered prolonged market compression since early 2022.
Fed Pivot Builds Steam: End of QT & Rate Cuts Signal Altcoin Momentum
Market focus sharpens on the Federal Reserve, with JP Morgan projecting an end to Quantitative Tightening (QT) could be announced at the upcoming FOMC meeting. Crucially, this anticipated end of QT, combined with growing expectations for interest rate cuts, appears to be building underlying altcoin momentum right now in October, even as prices consolidate.
This potential policy pivot arrives as global liquidity growth is forecast to accelerate into 2026, potentially reshaping traditional crypto cycles. Historically, such liquidity expansions driven by both halting QT and cutting rates, have consistently fueled significant inflows into risk assets, including altcoins.
Related: Why Did BTC, ETH, XRP & ADA Drop October & Can They Recover Before Halloween?
Record $7.5T Cash Hoard Signals Major Rotation Potential
Besides monetary policy, $7.5 trillion now sits in U.S. money market funds, an all-time high. As interest rates begin to decline, investors may redirect these idle funds into higher-yielding assets such as cryptocurrencies, equities, and real estate.
Such capital rotation has previously triggered major rallies. In 2009, similar liquidity movements propelled global markets by more than 300%. Hence, analysts argue that a comparable scenario could emerge once rate cuts commence.
Institutional Rails and Policy Momentum
Moreover, regulatory momentum continues to build. Coinbase CEO Brian Armstrong recently indicated that bipartisan progress on a comprehensive crypto market structure bill could accelerate before year-end. If finalized, the legislation may provide clearer compliance standards for exchanges and investment products, strengthening institutional participation in digital assets.
Ethereum’s ETF approval and upcoming altcoin ETF proposals are also expanding access to regulated investment channels. This growing framework positions the market for a potential “post-QT normalization” phase where liquidity remains steady, but without the restrictive effects of QT.
Altcoin Market Cap Defends $1T, Showing Resilience Before Breakout
Significantly, despite the long consolidation, the altcoin market cap excluding Bitcoin and stablecoins has held above $1 trillion. Analysts view this resilience as evidence of underlying strength even amid tightening conditions.
As the Fed approaches policy easing and institutional rails mature, altcoins may enter a new growth phase marked by higher lows and eventual breakout momentum.
Related: Here is Why Investors Expect an Altcoin Season to Happen Soon
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Source: https://coinedition.com/fed-easing-and-a-7-5-trillion-cash-pile-fuel-altcoin-breakout-expectations-in-october/
