The long-term fundamentals of the crypto market look promising, despite the turmoil in October and November that left asset prices down and investor confidence cratering, according to Hunter Horsley, CEO of investment firm Bitwise.
Horsley said the four-year market cycle was dead, replaced by a more mature market structure and changed dynamics due to the pro-crypto regulatory pivot in the United States. He said in a Friday X post:
“Since the launch of Bitcoin ETFs and the new administration, we have entered a new market structure: new players, new dynamics, new reasons why people buy and sell.
I think there is a good chance that we have been in a bear market for almost 6 months now and are almost out of it. The current crypto setup has never been stronger,” Horsely added.
His comments offer a contrarian view of crypto investor sentiment, which has fallen to its lowest level since February as asset prices remain well below 2024 highs and fear grips the market.
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Sentiment Craters to ‘Extreme Fear’ as Analysts Project Price Direction
The “Crypto Fear and Greed Index,” a metric that gauges investor sentiment, is at 16 as of this writing, signaling “extreme fear,” according to CoinMarketCap.
Market analyst and founder of CoinBureau, Nuc Puckrin, said that although the 25% drop is the lowest correction level drop during this cycle, compared to previous drops of over 30%, investor sentiment is still collapsed.
The price of Bitcoin (BTC) fell to a six-month low of $94,590 on Friday, prompting analysts to forecast a further decline to the $86,000 level.
Investor and financial educator Robert Kiyosaki has blamed the crypto market slowdown on low liquidity levels and said crypto and precious metals prices will rise once the government resorts to printing money to finance budget deficits.
Liquidity tends to determine asset prices; high liquidity due to low interest rates and expanding money supply pushes prices up, while lower liquidity and limited credit tend to push down asset prices or cause markets to stagnate.
Although the US Federal Reserve has started to cut interest rates, only about 44% of traders expect a rate cut in December, according to data from the Chicago Mercantile Exchange (CME).
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