The long-term fundamentals of the cryptocurrency market look promising, despite the October and November shake-up that has left asset prices down and investor sentiment in turmoil, according to Hunter Horsley, CEO of investment firm Bitwise.
Horsley said the four-year market cycle is dead, replaced by a more mature market structure and changed dynamics due to the pro-crypto regulatory shift in the US. He said in a Friday X post:
“Since the launch of Bitcoin ETFs and new management, 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 and are almost over it. The setup for cryptocurrencies right now has never been stronger,” Horsely added.
His comments offer a contrary view to cryptocurrency 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 sinks to “extreme fear” as analysts project where prices are headed
The “Cryptocurrency Fear and Greed Index,” a metric that measures investor sentiment, is at 16 at the time of writing, indicating “extreme fear,” according to CoinMarketCap.
Market analyst and CoinBureau founder Nuc Puckrin said that even though the 25% drop was the lowest correction level drop during this cycle, compared to previous drops above 30%, investor sentiment has still plummeted.
The price of Bitcoin (BTC) fell to a six-month low of $94,590 on Friday, prompting analyst projections of a further decline to the $86,000 level.
Investor and financial educator Robert Kiyosaki blamed the cryptocurrency market crash on low liquidity levels and said cryptocurrency and precious metal prices will rise once the government resorts to printing more money to finance budget deficits.
Liquidity tends to drive asset prices; High liquidity resulting from low interest rates and expanding money supply drives up prices, and lower liquidity and tight credit tend to lower asset prices or cause markets to stagnate.
Although the US Federal Reserve has begun to cut interest rates, only about 44% of traders predict a rate cut in December, according to data from the Chicago Mercantile Exchange (CME).
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