Cryptocurrency prices could be approaching a turning point after months of losses, as several recent developments could mark the start of a new bullish phase.
In a note published on Wednesday, Clear Street analyst Owen Lau said the roughly 44% decline in crypto markets between October 10 and February 28 may now represent the end of the latest downturn. If this period represented a crypto winter, he wrote, “so be it.”
Lau did not provide a price target for Bitcoin, but argued that sentiment and fundamentals have both improved in recent weeks, pointing to regulatory dynamics in Washington, deeper integration between crypto companies and the traditional financial system, and continued institutional adoption.
“The industry may well be reaching an inflection point, and we believe this trend has weight,” he wrote.
These comments come as the market has started to rebound. Bitcoin has risen about 11% over the past week and 8% over the past 24 hours as tensions in the Middle East escalate. The rally has brought the largest cryptocurrency closer to what many traders see as a key resistance level around $75,000.
Lau also said that U.S. President Donald Trump’s intervention Tuesday on the hotly contested but currently stalled CLARITY Act increases the chances that the law will pass Congress by the end of the summer. A catalyst that JPMorgan believes could be the spark the digital asset market needs to recover.
Additionally, infrastructure integration is also progressing after Kraken’s banking subsidiary received a master account from the Federal Reserve, allowing it direct access to the central bank’s payment system. Lau said the move represents a structural step toward integrating crypto-native institutions into the US financial system.
As if that were not enough, Lau also highlighted the growing participation of institutions as another potential catalyst for recovery. Morgan Stanley recently amended a filing for a proposed bitcoin spot ETF to name Coinbase Custody as a co-custodian alongside Bank of New York Mellon, strengthening Coinbase’s (COIN) role in the institutional crypto ecosystem.
Lau, who covers several major crypto companies including Coinbase (COIN), Circle (CRCL), and Bullish (BLSH), currently has a buy rating on Coinbase and Bullish, and a hold rating on Circle.
“Bull trap”
However, not everyone is convinced that the recovery marks the start of a lasting recovery.
Some traders are warning that the latest move could turn into a classic bull trap – a brief breakout that attracts buyers before reversing lower.
Analysts have pointed to heavy overhead supply and positioning in derivatives markets as potential risks, with some suggesting a rally into the $72,000-$76,000 range could attract sellers rather than confirming a sustainable uptrend.
Lau, for his part, believes recent developments could signal a broader shift for the industry.
“The industry may well be reaching an inflection point, and we believe this trend has weight,” he wrote.
Read more: Bitcoin ‘air pocket’ above $72,000 could mean quick run to $80,000
