Daily Crypto Analysis: Why 2026 Won't See Broad Altcoin Rally

• Analyst Jeff Ko predicts no broad-based altcoin bull market in 2026, contrary to previous cycles
• Liquidity expected to concentrate on select blue-chip cryptocurrencies with real-world utility
• Correlation between global M2 money supply and Bitcoin price has weakened since spot ETF launch
• Market sentiment currently at "Extreme Fear" with Bitcoin trading at $87,658 (-1.29% 24h)

NEW YORK, December 23, 2025 — The cryptocurrency market faces a structural shift that challenges conventional bull market expectations, according to a new Daily Crypto Analysis perspective. CoinEx analyst Jeff Ko argues that 2026 will not witness the broad-based altcoin rallies that characterized previous cycles, instead predicting liquidity concentration on a limited number of assets with demonstrable utility. This analysis emerges as Bitcoin trades at $87,658 amid "Extreme Fear" market sentiment, raising questions about traditional correlation models.

Market Context & Background

Market structure suggests a departure from historical patterns where liquidity injections triggered synchronized altcoin appreciation. The 2020-2021 cycle saw Bitcoin dominance drop from 70% to 40% as capital flowed into thousands of alternative assets. Current on-chain data indicates this dynamic has fractured. The launch of spot Bitcoin ETFs in January 2024 created a new liquidity channel that appears to be siphoning capital from smaller assets. According to Federal Reserve data, the correlation coefficient between global M2 money supply growth and Bitcoin price appreciation has declined from 0.85 in 2021 to approximately 0.42 currently. This decoupling challenges the "rising tide lifts all boats" narrative that dominated previous bull markets.

Related developments in this market environment include futures liquidations signaling market stress and Bitcoin posting its worst quarterly loss since 2018.

What Happened?

In an interview with Cointelegraph, CoinEx analyst Jeff Ko presented a contrarian view to mainstream bull market expectations. According to Ko, even amid potential global liquidity expansion in 2026, any resulting rally would be selective rather than broad-based. He specifically noted that market liquidity would concentrate on "a small number of blue-chip cryptocurrencies with real-world use cases" rather than lifting all assets uniformly. Ko further observed that the correlation between global M2 money supply growth and Bitcoin's price has weakened significantly since the launch of spot Bitcoin ETFs, suggesting traditional macroeconomic drivers may have diminished influence.

The analysis comes as the Crypto Fear & Greed Index registers a score of 24/100, indicating "Extreme Fear" sentiment among market participants. Bitcoin's current price of $87,658 represents a 1.29% decline over the past 24 hours, continuing a pattern of volatility that has characterized the fourth quarter of 2025.

Technical Analysis & Price Action

Volume profile analysis reveals concerning liquidity distribution across the cryptocurrency market. Bitcoin dominance currently sits at 52.3%, having recovered from a 2023 low of 38%. The 200-day moving average for BTC/USD stands at $84,200, while the 50-day MA provides resistance at $89,500. Relative Strength Index (RSI) readings across major altcoins show consistent divergence from Bitcoin, with many registering oversold conditions below 30.

A critical Fair Value Gap (FVG) exists between $82,000 and $85,000 on Bitcoin's daily chart, representing a potential liquidity grab zone. The $90,000 level serves as a psychological resistance and order block that has rejected multiple rally attempts throughout Q4 2025. For Ethereum, the implementation of EIP-4844 (proto-danksharding) has failed to generate sustained buying pressure, with ETH/BTC ratio continuing its downward trajectory since September.

Bullish Invalidation Level: A sustained break below the 200-day moving average at $84,200 would invalidate any near-term bullish structure, potentially triggering a cascade toward the $78,000 support zone.

Bearish Invalidation Level: A weekly close above $92,000 with expanding volume would challenge the current bearish narrative, potentially signaling a shift in market structure.

By The Numbers

Why It Matters

For institutional investors, this analysis suggests a fundamental shift in portfolio construction methodology. The traditional "beta play" of allocating to altcoins for leveraged Bitcoin returns may no longer be effective. Instead, due diligence on specific use cases and adoption metrics becomes paramount. The weakening correlation between monetary expansion and crypto prices indicates these assets are maturing beyond pure inflation hedges, potentially reducing their sensitivity to Federal Reserve policy shifts.

For retail traders, the implications are more severe. The era of indiscriminate altcoin buying during bull markets appears to be ending. Market structure suggests capital will flow toward projects with demonstrable utility and sustainable tokenomics, while thousands of smaller assets may face permanent illiquidity. This creates a bifurcated market where selection skill outweighs timing, fundamentally altering risk-reward calculations for speculative positions.

Community Sentiment

Market analysts on X/Twitter reflect divided perspectives on this liquidity concentration thesis. CryptoQuant CEO Ki Young Ju noted, "Bitcoin ETF inflows continue to dominate institutional capital allocation, creating a winner-takes-most dynamic." Conversely, some altcoin proponents argue that layer-2 scaling solutions and modular blockchain architectures will drive the next wave of adoption beyond Bitcoin. The prevailing sentiment among quantitative analysts suggests skepticism toward broad-based rallies, with many pointing to on-chain data showing declining active addresses across non-top-20 assets.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin establishes support above its 200-day moving average and breaks through the $92,000 resistance with conviction, selective altcoins with strong fundamentals could see outsized gains. Ethereum might benefit from increased staking yields post-EIP-4844, while decentralized physical infrastructure networks (DePIN) tokens could capture institutional interest. In this scenario, Bitcoin could test its all-time high near $100,000 by mid-2026, with quality altcoins appreciating 50-100% against BTC.

Bearish Case: Continued failure to reclaim the $90,000 level would confirm distribution patterns observed on higher timeframes. A break below the $84,200 support could trigger a liquidation cascade toward $78,000, representing a 10% decline from current levels. In this environment, altcoins would face disproportionate selling pressure, with many smaller assets declining 30-50% against Bitcoin. The "Extreme Fear" sentiment would likely persist, creating a negative feedback loop of declining liquidity and volatility compression.

FAQs

What does "broad-based altcoin bull market" mean? This refers to market conditions where most alternative cryptocurrencies appreciate significantly against both USD and Bitcoin, as seen in 2017 and 2021 when thousands of assets achieved multi-thousand percent returns.

Why has the correlation between M2 money supply and Bitcoin price weakened? The introduction of spot Bitcoin ETFs created a regulated, institutional pathway for exposure that may have decoupled Bitcoin from pure monetary policy narratives. Additionally, Bitcoin's maturation as an asset class has introduced more diverse price drivers beyond money supply expansion.

Which cryptocurrencies qualify as "blue-chip with real-world use cases"? While definitions vary, analysts typically point to assets like Ethereum (smart contract platform), Chainlink (oracle network), and Filecoin (decentralized storage) as examples of projects with demonstrable utility beyond speculation.

How does "Extreme Fear" sentiment affect market dynamics? Extreme fear typically correlates with capitulation events, high volatility, and potential buying opportunities for contrarian investors. However, it can also indicate structural issues like declining liquidity or regulatory uncertainty.

What technical indicators should traders monitor for altcoin selection? Beyond price action, on-chain metrics like active addresses, transaction volume, and development activity provide insight into fundamental strength. Technically, relative strength against Bitcoin and volume profile analysis help identify assets with sustainable momentum.

Data source: Read Original Report

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.