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Altcoin Markets Show Recurring 120-Day Downtrend Cycle as Base Formation Begins

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TLDR:

  • Altcoin markets have experienced two identical 120-day downtrends since January 2024 during peak optimism phases. 
  • Total3 market cap shows rally-distribution-bleed-reset pattern rather than continuous upward bull cycle movement. 
  • Price has returned to major support zone while RSI sits at depressed levels after months of declining momentum. 
  • Historical pattern suggests capitulation windows occur when 120-day cycles repeat within same market structure.

 

Altcoin markets have consistently followed a 120-day downtrend pattern over the past two years, according to recent market analysis.

The cycle appears during periods of peak optimism and extends into full four-month corrections. Traders holding positions in recent drawdowns may find relief in understanding this recurring timeframe. The pattern suggests markets move in predictable blocks rather than continuous upward momentum.

Recurring Downtrend Structure in Altcoin Markets

Total3 market capitalization data reveals a consistent rhythm since January 2024. Markets experience sharp rallies followed by extended distribution phases.

The first quarter of 2024 saw altcoins surge before entering a 120-day decline. During these periods, bounces get sold, and sentiment turns negative.

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Later cycles showed identical behavior. A fourth-quarter rally materialized before another 120-day correction pushed into early 2026. The duration matched previous patterns almost exactly. This repetition indicates structure rather than random volatility.

Market observers from Our Crypto Talk noted how most participants only recognize the rally phases. Successful traders track the reset periods with equal attention.

The current environment sits within another reset zone. These blocks follow a sequence: rally, distribution, slow decline, reset, then another rally.

Understanding this rhythm changes how traders approach positioning. Markets don’t move in straight lines during bull cycles.

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Instead, they advance through predictable consolidation periods. Recognition of these phases helps separate short-term noise from longer-term trend development.

Technical Setup Points to Potential Base Formation

Current price action has returned to a major support band that previously acted as a floor. The market has repeatedly reacted around this zone in past cycles.

This area represents significant accumulation levels from earlier timeframes. Price behavior near established support often signals exhaustion of selling pressure.

Momentum indicators show complementary signals. RSI has trended downward for months and now sits at depressed levels.

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While no single indicator guarantees reversals, compressed momentum after timed downtrends typically precedes shifts. Selling pressure appears to be reaching exhaustion points.

The convergence of time-based cycles and technical levels creates noteworthy conditions. When 120-day downtrends appear twice within the same cycle, they often mark capitulation windows.

Weak positions exit while value-focused buyers begin accumulating. This phase doesn’t guarantee immediate upside but shifts probability distributions.

Market structure suggests a transition from random downside to base building. Bitcoin’s stability could catalyze altcoin bid activity in coming weeks.

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The panic phase appears complete based on historical cycle comparison. Patience becomes valuable during these periods as markets digest previous excesses and establish foundations for subsequent moves.

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Crypto World

WLFI May Have Signaled Crypto Crash Hours Before Bitcoin: Study

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WLFI May Have Signaled Crypto Crash Hours Before Bitcoin: Study

World Liberty Financial Token (WLFI), a DeFi governance token affiliated with the Trump family, may have signaled a major market breakdown hours before Bitcoin moved, according to a new analysis by data provider Amberdata.

The report examines trading activity on Oct. 10, 2025, when roughly $6.93 billion in leveraged crypto positions were liquidated in under an hour. Bitcoin (BTC) fell about 15% and Ether (ETH) dropped roughly 20%, while smaller tokens lost as much as 70%.

Amberdata found that WLFI began a sharp decline more than five hours before the broader market downturn. At the time, Bitcoin was still trading near $121,000 and showed little immediate stress.

“A five-hour lead time is hard to dismiss as coincidence,” Mike Marshall, who authored the report, told Cointelegraph. “That duration is what separates a genuinely actionable warning from a statistical artefact,” he added.

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Related: Senators ask Bessent to probe $500M UAE stake in Trump-linked WLFI

WLFI anomalies before the selloff

Researchers analyzed three unusual patterns, including a surge in trading activity, a sharp divergence from Bitcoin and extreme leverage, to determine whether WLFI signaled stress before the broader market selloff.

WLFI’s hourly volume jumped to roughly $474 million, about 21.7 times its normal level, within minutes of tariff-related political news. Meanwhile, funding rates on WLFI perpetual futures reached about 2.87% every eight hours, equivalent to an annualized borrowing cost near 131%.

WLFI funding rating. Source: Amberdata

The study does not claim insider trading occurred. Instead, it argues the way crypto markets are structured can make certain assets matter more than their size suggests.

WLFI’s holder base is concentrated among politically connected participants, the report says, unlike Bitcoin’s widely distributed ownership. Marshall said the trading pattern appeared “instrument-specific,” meaning activity was focused on WLFI rather than across the broader crypto complex.

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“If this were superior analysis (sophisticated participants reading the tariff headlines faster and drawing better conclusions) you’d expect to see that reflected more broadly,” he said. “What we actually saw was concentrated activity in WLFI first.”

The timing is notable. Trading volume accelerated roughly three minutes after public tariff news. Marshall said such speed suggests prepared execution rather than retail traders interpreting headlines in real time.

The link between WLFI and the broader market drop comes down to leverage. Many crypto trading platforms let traders use several assets as collateral for borrowed positions. When WLFI fell sharply, the value of that collateral dropped, forcing traders to sell liquid assets like Bitcoin and Ether to cover their positions. Those sales pushed prices lower and triggered further liquidations across the market.

WLFI crashed ahead of Bitcoin. Source: Amberdata

Related: Trump family’s WLFI plans FX and remittance platform: Report

WLFI reacted faster than Bitcoin to stress

Amberdata’s data shows WLFI’s realized volatility reached nearly eight times that of Bitcoin during the episode, making it particularly sensitive to stress. Researchers argue that structurally fragile, highly leveraged assets may move first during market shocks.

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Marshall said the findings should not be interpreted as proof that WLFI can reliably predict downturns. The analysis covers a single event, and more data would be needed to establish statistical consistency. Still, he believes the behavior is significant.