Cryptocurrency analyst Dan Gambardello highlights the compelling correlation between the US dollar index and the crypto market cycle, suggesting that the next big rise in altcoins could be a reflection of 2017’s rise.
In a detailed video analysis, he points out striking similarities between the dollar’s current movements and patterns seen during Trump’s first inauguration, when crypto markets experienced parabolic growth.
The technical setup draws particular attention to the dollar’s recent behavior, which closely follows the 2016-2017 period. With Trump’s upcoming inauguration in January 2025, Gambardello sees the potential for history to repeat itself, as a weakening dollar typically supports risky assets like cryptocurrencies.
Historical Dollar Patterns and Impact on Crypto
Gambardello analyzes a key chart comparing the current movements of the US dollar to the 2016-2017 period. During Trump’s first inauguration in January 2017, the dollar peaked after he declared that the “dollar is too strong” and expressed concern about US companies competing with China.
The subsequent dollar weakness helped fuel one of the strongest crypto bull markets, with both Bitcoin and altcoins seeing parabolic price gains.
The analyst points out that today’s dollar chart closely follows this historical pattern. Using monthly Bitcoin data, it overlays key market cycles marked by Bitcoin halvings (yellow lines) and periods of declining Bitcoin dominance (purple lines).
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The timing seems particularly relevant – just like in 2017, Bitcoin’s dominance has recently begun to decline as the dollar shows signs of potential weakness ahead of Trump’s return to office.
“We’re a mirror image of where we were two cycles ago,” explains Gambardello, noting both the political parallels and the timing of the market cycle. These patterns are given added weight because the 2017 cycle performed more strongly than the 2021 cycle, which he attributes in part to the dollar’s weakness during that period.
Current market setup and future projections for altcoins
The structure of the altcoin market shows promising similarities to previous cycles. Gambardello notes that while the total market cap of altcoins is only 11% below its all-time high, during the equivalent period in the last cycle, altcoins were trading 40-70% below their peak before dramatic upward moves. This comparison suggests significant room for growth in the current cycle.
Trump’s potential impact on dollar policy adds another layer to the analysis. While he didn’t specifically call the dollar “too strong” as he did in 2017, Gambardello points out several factors that could lead to dollar weakness under Trump’s policies:
- Its focus on trade competitiveness often favors a weaker dollar
- The proposed tariffs could trigger retaliatory measures from other countries, putting pressure on the dollar
- Trump’s historical preference for lower interest rates to support markets
The technical setup for altcoins reflects patterns from early 2024, when the market saw strong gains. Gambardello identifies a key resistance level at the “lower high Fibonacci area”, suggesting that the current consolidation below this level could lead to another leg higher, similar to previous breakout patterns.
Trading implications and market outlook
The combination of technical patterns and macro factors creates what Gambardello calls “new data” that supports the bullish case. A fourth monthly green candle forms on Bitcoin’s chart as the dollar shows top signals – a setup that previously saw the crypto rally strongly.
For traders watching the altcoin markets, these patterns suggest preparing for potential upside moves rather than fearing the recent gains that mark the top.
Looking at certain price levels, altcoins have reached what Gambardello describes as a “consolidation zone.” The current resistance matches patterns from January 2024, when markets stalled briefly before rallying.
The analyst explains how the 20-day and 50-day moving averages consolidate in a way that often precedes larger moves – specifically, seeing the 20-day average cross above the 50-day, which could signal the next step in the uptrend.
Gambardello emphasizes patience during this setup phase. While short-term dips could cause fear in the market, the larger pattern suggests a period of consolidation rather than a trend reversal. He draws parallels with early 2024, when similar periods of consolidation led to continued growth.
