According to Sygnum Bank’s latest fourth-quarter market outlook, the ongoing crypto bull market is “on thin ice” as macroeconomic pressures weigh heavily on digital asset performance. However, the report also highlights Ethereum’s strengthening fundamentals, suggesting it could be preparing for a significant breakout before year-end.
Macro Conditions Weigh on Crypto Markets
Sygnum’s analysts noted that expectations for a sustained altcoin rally have faded as traders face renewed economic uncertainty. Earlier optimism surrounding a potential “altseason” quickly evaporated when former U.S. President Donald Trump reignited trade tensions with new tariff threats.
“The disappointing response to the Fed’s recent rate cut announcement further cut hopes of the highly anticipated altseason short,” the report stated, adding that macro headwinds have crushed overleveraged positions across the altcoin sector.
Just two weeks earlier, market sentiment was far more upbeat. Ethereum (ETH) and Solana (SOL) were both surging, while Bitcoin dominance had dropped by 12% — often viewed as a key indicator of capital rotation into altcoins.
However, as U.S. inflation data remained sticky and rate expectations shifted, long-term Bitcoin holders began taking profits. The move coincided with Bitcoin’s recent all-time high of $126,198 on October 6, marking what some analysts believe could be the cycle top for this phase of the bull market.
Altcoins Under Pressure — But Fundamentals Stay Strong
Despite the near-term weakness, Sygnum remains optimistic about the broader structure of the crypto economy. The report points to several factors supporting long-term resilience, including:
- Rising institutional adoption and treasury demand for altcoins, signaling renewed interest from corporate entities.
- Strong liquidity and robust on-chain fundamentals, which continue to improve even amid market corrections.
- Progress in regulatory clarity, particularly around ETF approvals and crypto-related legislation.
The bank also highlighted that although the U.S. government shutdown has delayed certain crypto-friendly initiatives, more than 150 ETF applications remain pending. These include submissions from BlackRock, Fidelity, and other major institutions.
Sygnum believes that once approvals begin, the shift in sentiment could be rapid — potentially reigniting market enthusiasm and triggering a new leg higher for digital assets.
Ethereum’s Strength Points to Potential Breakout
While most traders are fixated on Bitcoin’s price movements, Sygnum’s analysts argue that Ethereum may be quietly positioning for a major Q4 rally.
The report reveals that corporate reserves in Ethereum have surged 15x, reaching nearly $24 billion. This surge has contributed to approximately 40% of Ethereum’s total supply being locked or staked, creating a significant supply-side constraint that could push prices upward once demand returns.
These dynamics, combined with Ethereum’s ongoing role as the backbone of decentralized finance (DeFi) and tokenized assets, suggest that ETH could outperform in a recovery phase.
“Ethereum’s structural strength and supply dynamics place it in a unique position to benefit when macro pressure eases,” the report concluded.
Outlook: “Thin Ice,” But Not Cracked Yet
Sygnum’s overall tone remains cautious but not pessimistic. The bank maintains that while the crypto bull market may be “on thin ice,” the fundamentals underpinning digital assets are significantly stronger than in past cycles.
If macro conditions stabilize — particularly if the Federal Reserve signals a pause in tightening or if ETF approvals begin — Ethereum and select altcoins could lead the next wave of market recovery.
For now, traders are advised to watch key support zones for Bitcoin and Ethereum closely while monitoring developments around trade policy and monetary decisions in the U.S.
