Key Takeaways
- Markets remain buoyant amid US government shutdown
- Continued gold strength could hint in favor of an elongated crypto cycle
- Retail driven alt coin surge hasn’t happened yet with most alts consolidating
Digital Asset Commentary
The US government remains shut down for now, but markets have pressed on. Equities continue to notch near-daily all-time highs, joined by gold and Bitcoin. Since September 26th, Bitcoin has gained nearly 15%, supported by the USD debasement narrative and seasonal tailwinds. Based on the measured move of its most recent range, near-term BTC targets remain in the $140k–$160k zone. A sharp rebound in the US dollar, if it occurs, could temporarily dampen this rally.
Although the current cycle appears to be unfolding in a fairly standard way, one notable difference is gold’s strength this late in the crypto cycle. In both the 2018 and 2022 cycle peaks, gold was stuck in a quiet consolidation. This time, gold broke out in April 2024 and has since rallied more than 90%, pausing only for brief consolidations along the way. Continued gold strength could signal an elongated crypto cycle, but as Sir John Templeton warned, “The four most dangerous words in investing are: ‘This time it’s different.’” Conversely, if gold begins consolidating around $4,000 toward the end of the year, it could be a sign that the crypto cycle is nearing its peak.
Historically, Bitcoin tends to lag gold, and altcoins tend to lag Bitcoin, especially mid and lower-cap alts. Ethereum, Solana, and other cryptocurrencies with ETFs are more likely to track Bitcoin closely. Toward the end of a cycle, altcoins typically see one last euphoric surge over a short period, driven by retail participation, a move that hasn’t happened yet this cycle. Global and US rate cuts or stimulus measures in 2026 could also extend the four-year crypto cycle, similar to the COVID stimulus in 2020. For now, many mid to low-cap alts remain stuck in multi-month consolidations or are breaking down. Savvy traders are focusing on breakout setups in the coming weeks, expecting laggards to follow in what may be the final push of the cycle.
