Tuesday brought a tale of two markets: stocks pushed higher on rate cut hopes, while cryptocurrencies mostly treaded water. The contrast highlights how crypto is still finding its footing after recent volatility.

Here's where major cryptocurrencies stood at 8:25 p.m. ET:

Consolidation Mode After Recent Rally

Bitcoin spent the day trapped in a fairly tight range between $86,000 and $88,450, taking a breather after its recent climb. Trading volume dropped 11% over the past 24 hours, suggesting traders are sitting on their hands for now. Ethereum showed similar hesitation, consolidating around recent gains but failing to punch through the psychologically important $3,000 level that bulls have been targeting.

Market dynamics shifted slightly, with Bitcoin's dominance slipping below 58% while Ethereum's market share fell to 11.8%. That's a signal that some capital is rotating, though not necessarily in the direction altcoin enthusiasts were hoping for.

Strategy Inc. (MSTR), the Bitcoin-accumulating company formerly known as MicroStrategy, dropped 3.83% during regular trading as the crypto proxy reflected broader digital asset weakness.

The liquidation picture was messy. According to Coinglass, over $300 million in positions got wiped out in the last 24 hours, with roughly equal amounts of longs and shorts getting caught on the wrong side of the trade. Bitcoin's open interest declined 0.51%, roughly tracking the dip in spot price.

Sentiment, as measured by the Crypto Fear & Greed Index, remained stuck in "Extreme Fear" territory. Not exactly the backdrop for explosive moves higher.

A few altcoins managed to buck the trend. Monad surged 47.18% to $0.04762, Story gained 19.77% to $2.94, and Waves climbed 14.86% to $0.8675. Still, the global cryptocurrency market capitalization stood at $3.01 trillion, down 0.41% over the past 24 hours.

Stocks Rally on Rate Cut Optimism

While crypto took a siesta, traditional markets had a party. The Dow Jones Industrial Average jumped 664.18 points, or 1.43%, to close at 47,112.45. The S&P 500 gained 0.91% to finish at 6,765.88, and the tech-heavy Nasdaq Composite rose 0.67% to 23,025.59.

What's driving the optimism? Traders are increasingly convinced the Federal Reserve will cut rates in December. Thanks to dovish comments from key central bank officials, the CME FedWatch tool now shows 84% odds of a rate cut next month. Just a week ago, those odds were sitting at 50%. Prediction markets like Polymarket and Kalshi are also heavily favoring a 25 basis point cut at the Fed's meeting.

Lower rates are generally considered crypto-friendly since they reduce the opportunity cost of holding non-yielding assets. But the immediate reaction has been muted, suggesting the market needs more than just monetary policy tailwinds.

Don't Hold Your Breath for Altcoin Season

If you're waiting for altcoins to finally have their moment in the sun, you might want to pack a lunch. Analysts at cryptocurrency company B2BINPAY see a "very small chance" that altcoin season arrives before year-end.

"The problem is that liquidity is dormant. We don't see any rotation. Bitcoin dominance has been holding in the 58-61% range since early October, meaning capital is sitting in 'storage mode,'" the analysts explained in a note shared with MarketDash.

Their base case? Early 2026 for altseason to truly begin. That's a long wait for anyone hoping smaller cryptocurrencies would catch fire alongside Bitcoin's rally.

Technical Analysts Eye Key Levels

On the charts, widely followed cryptocurrency analyst and trader Michaël van de Poppe identified $85,500 as critical support for Bitcoin. If that level breaks, he warned of a potential retest of the $80,800-$82,000 zone.

"Holding here = target zone of $90,000-$92,000 in the coming days," Van de Poppe predicted, laying out a clear risk-reward scenario for traders.

Ali Martinez, another prominent cryptocurrency researcher, spotted something potentially more concerning: a bearish flag pattern on Bitcoin's 1-hour chart. His analysis suggests a possible drop to $79,000 if the pattern plays out.

For those unfamiliar with technical analysis, a bearish flag is a chart pattern that typically signals the continuation of a downtrend. Think of it as a brief pause before the selling resumes. It's not a guarantee, but it's the kind of setup that makes traders nervous.

The crypto market is at an interesting crossroads. Rate cut optimism should theoretically be bullish, but sentiment remains fearful and liquidity appears stuck. Whether Bitcoin holds key support levels in the coming days could determine if this consolidation is just a rest stop or the beginning of a deeper pullback.