Welcome to this week’s analysis on which altcoins are performing well and which ones are not. You can view the list here:
Macro Update
There’s a few Macro items I want to address that I’ve been getting a lot questions about:
- Does the Fed cutting interest rates mark the top in the cycle?
- What if the Fed does not cooperate with cutting interest rates? Does this mean the cycle is over?
- Is the 4-year cycle still valid for crypto?
- Does Artificial Intelligence (AI) have any impact on this cycle?
The answers to these overlap to some extent so let’s dive into it.
Do Interest Rate Cuts Mark the Top?
I have seen this claim floating around a lot that “When the Fed starts cutting interest rates, the top is in for stocks and crypto”. So let’s take a look at the charts and see what the data tells us. Context matters in this situation (not just looking at interest rates by itself) so when looking at Fed interest rates, I also look at US PMI (a real-time gauge of the business cycle) and since 2008, Global M2 YoY because in the age of money printing or quantitative easing (QE), this is one of the most influential factors in affecting risk assets. Another factor that I see a lot of Macro analysts ignoring is the technological influence. I went down the rabbit hole with Grok when I stumbled upon this post regarding job losses. I then layered in all the other factors at play with the current environment to see if there was another point in history similar to this one. You can go through the full read here: https://x.com/i/grok/share/S8hN5Sffz7U2K67evK5fsv9A0
TLDR version from the Grok conversation:
The 1990s jobless recovery (post-1990-1991 recession) is most similar to 2025’s environment due to weak job growth lagging behind GDP/profits, PMI below 50 with Fed rate cuts, and corporate efficiency focus. Technologically, it parallels AI’s current disruptions via “routine-biased technological change” (RBTC), where computers automated middle-skill jobs, causing skill mismatches and inequality—much like AI’s impact today on routine/cognitive tasks. The 2000s and 2010s are less analogous, as their tech shifts were more cyclical or secondary.
So given all this context, I created a chart with the Nasdaq, Fed Rates, US PMI and Global M2 YoY to get a full picture of the situation. If this plays out similar to the early 1990s, then we have a lot more growth ahead in risk assets, especially tech stocks and altcoins.
The bottom line is:
Rate cuts do not necessarily mark the top with risk assets. The business cycle should also be considered which is measured through US PMI. If rate cuts are occurring with PMI declining then there’s a strong chance risk assets will decline. However if you have rate cuts along with PMI increasing then the chances heavily favor growth in risk assets (especially small caps). The data shows this current market environment is most similar to the early 1990s which was followed by exponential growth in tech stocks. This suggests we could see similar growth for tech stocks and crypto.
What If the Fed Does Not Cut Interest Rates?
As you may have gathered from the above, cutting interest rates does not hold as much weight in impacting risk assets like PMI does. In the age of QE, it’s the growth in Global M2 that holds a lot of weight plus the health of the business cycle. An Altcoin Screener Pro member shared a report from Michael Howell on liquidity and I did some further analysis with ChatGPT which you can read more about here: https://chatgpt.com/share/68bd6a7c-6fe0-8000-a698-b78b98f9ca13
Even if the Fed does not cooperate, there is still the Treasury that can provide liquidity support (which has been the main go-to this cycle) and now there’s an additional lever from the Genius Act which allows private companies to issue their own stablecoins. Part of this law is that when a company issues a stablecoin they have to back it by buying Treasury bills which is a form of liquidity injection. I think this was a strategic move to get away from relying too much on the Federal Reserve for liquidity and put more of this power in the hands of private companies.
The bottom line based on my framework is:
As long as Global M2 is growing and PMI is in expansion (multiple months above 50), risk assets will go higher. Cutting interest rates would certainly help but it’s not necessary. Even if the Fed does not cooperate, the Treasury and stablecoin issuers can provide liquidity support in the meantime which continues to show signs of growth.
Is the 4-Year Cycle Still Valid?
I see many analysts who have followed the 4-year cycle previously claim that it’s still intact and the cycle will end this year. Even one of the analysts that I have a lot of respect for announced that he sold on August 29:
You can read more in depth about the 4-year cycle here:
When I first came across this theory, I was fascinated with how these cycles seemed to fit nicely into these 4-year timeframes. I even went as far as creating my own Bitcoin Seasonality index based on CryptoCon’s cycles theory:
But then I noticed that signs of deviation started to emerge like Bitcoin making new all-time highs so early in the cycle in March 2024, or altcoin season not occurring in early 2025 like many had anticipated (including myself). This made me realize I had to seek alternative frameworks to better understand the current market environment. I had already been following some macro data previously but have since doubled down on it the last few months because of how much more clarity it brings. It helps explain why this cycle seems so sluggish especially for altcoins. As I covered in previous newsletters, it’s the second longest PMI contraction in history that I think is responsible. The good news is that we are seeing signs of PMI increasing again especially leading indicators like this one from Real Vision:
And also my leading indicator for PMI which is Global M2 YoY with a 5-month lead is showing higher as well. I updated my chart comparing US PMI, Global M2 YoY and Altcoin Market Cap. For this version, I added the timeframes of PMI contraction from the previous two crypto cycles with altcoins to illustrate how different this cycle has been to the past two:
| Cycle | Months in PMI Contraction (below 50) |
| 2015-17 | 6 |
| 2019-21 | 11 |
| 2023-present | 34 |
Going back to the original question “Is the 4-year cycle still valid?”. The evidence shows the chances of a 4-year cycle are diminishing especially since we have yet to see the rest of the cycle play out:
- No major cycle top indicators for Bitcoin have triggered such as Pi Cycle Top, MVRV and many others that called cycle tops in the past. For a longer list, you can check them out there. Not one single one has triggered: https://www.coinglass.com/bull-market-peak-signals
- No prominent altcoin season has occurred with many major altcoins like Ethereum and Solana have yet to be firmly above their previous all-time highs
- PMI still in contraction and historically, the prominent altcoin season kicks off when PMI enters expansion for at least 3 months
I think it’s misleading to claim that because this cycle has been so sluggish that it means it’s over within 4 years no matter what. To be clear, I don’t think the cycle is over, it’s just delayed. Market cycles have variation when you look further back in history. I think it’s short sighted to use only crypto’s history as a reference when we’ve had a much longer history of financial markets that can be referenced. This is why I incorporate macro analysis into my framework especially in times like this where crypto-only theories start showing signs of cracks.
Does Artificial Intelligence (AI) Have Any Impact on This Cycle?
I will keep this one brief because I covered it in a previous section in terms of the macro picture but I wanted to add a personal note to this and something that might help you navigate the future of work. If we are entering a similar period like the age of the PC, you are going to have winners and losers emerge in the job market. The winners are the ones who can adapt with new technologies and use it to become more productive and gain an edge in the job market. I encourage everyone to use AI tools like ChatGPT, Grok, etc. as it will grant you a massive edge over people who do not use them. We witnessed something similar with the rise of the PC: those who embraced it faster ending up getting the jobs of the future. It’s hard to tell exactly where things will go from here because we’re still in early stages of this AI era. Every new major technology like this creates controversy because many do not understand it and resort to fear mongering and fear of change as a coping mechanism. For anyone reading this that is second guessing AI, really ask yourself “why?”. Most likely it’s because of fear and you face that fear by spending time to understand it. See how it can be used to your advantage otherwise you risk getting left behind.
Bitcoin Update
On a monthly timeframe, Bitcoin is showing green so far this month. Like I covered last week, Bitcoin finished August in red and when you look at this cycle so far since 2023, it seems that August has been a red month every time and has marked a local bottom. The weakness that many anticipate for September perhaps is already behind us…
If Bitcoin can reclaim $112,000 on the daily timeframe then I think bullish momentum will return otherwise it’s just sideways until then. The short term bearish case would be a drop to around $102,000 near MA200.
Ethereum Update
Ethereum is going sideways near its all-time high. The bullish case is we continue higher from here and make new all-time highs. The bearish case is we drop to either the 20-weekly EMA around $4000 or to $3800 before resuming its uptrend. I am still expecting for an explosive move higher and once firmly above all-time highs, we will see the rest of the altcoin market catch up in due time.
ETH/BTC has marked a local bottom since April 2025 and we could see a pullback soon to allow other altcoins to shine:
Solana Update
Solana is still going sideways near its highs. Although the PMI did not print above 50, I think an interest rate cut will cause a boost to the market. I think by the end of the year, we will see PMI above 50 which will be a major catalyst for altcoins. I still think $250 is a possibility this month.
My theory is still playing out with Solana vs. Bitcoin being above MA200 and as long as it holds here, I think we’re about to witness a surge higher similar to what we saw in the second half of 2024. I think it’s safe to say that this has bottomed.
Dogecoin Update
Dogecoin is starting to break above this trendline and need to see it break above 0.25 and then 0.30 for sustainable bullish momentum. The bearish/boring case is we keep going sideways between 0.20 and 0.25.
Sui Update
Sui is holding above MA200 as anticipated. We need to see a break above 3.50 and $4 and we’ll see it surge to all-time highs. The bearish case is we continue sideways between $3-4.
Large Caps
For large caps, here’s the ones that stand out on a long term timeframe:
- XRP
- Sui
- Stellar
- Hyperliquid
I think once Dogecoin starts breaking to the upside, Pepe will soon follow.
Model Portfolio Update
The open positions is showing a positive return of roughly 29%:
The overall portfolio performance considering closed positions is roughly a 12% positive return:
We added to this dip in some positions. To see the detailed analysis on Mid Caps and Small Cap sector outperformers as well as the complete portfolio, sign up and become a pro today and gain an edge in the crypto market.