The crypto market’s long-term fundamentals remain promising, despite recent volatility in October and November that has left asset prices down and investor sentiment at new lows. According to Hunter Horsley, CEO of investment firm Bitwise, these shifts have not derailed the sector’s potential. Instead, Horsley suggests that the traditional four-year crypto market cycle is “dead,” giving way to a more mature market structure fueled by regulatory developments in the United States.
“Since the launch of the Bitcoin ETFs and new administration, we’ve entered a new market structure: new players, new dynamics, new reasons people buy and sell,” Horsley said in a Friday post on X. “I think there’s a pretty good chance that we’ve been in a bear market for almost 6 months now and are almost through it. The setup for crypto right now has never been stronger,” he added.
Horsley’s comments stand out as a contrarian view amid general investor pessimism. Crypto sentiment has dropped to its lowest level since February, as asset prices remain well below their 2024 highs and fear dominates the market.
**Sentiment Craters: “Extreme Fear” Takes Hold**
The Crypto Fear and Greed Index—a key gauge of investor emotion—currently reads 16, signaling “extreme fear,” according to CoinMarketCap. Market analyst and CoinBureau founder Nuc Puckrin pointed out that despite Bitcoin’s recent 25% dip being the smallest correction so far this cycle (previous market drops exceeded 30%), sentiment has nonetheless reached a low point.
On Friday, Bitcoin (BTC) prices fell to a six-month low of $94,590, raising concerns among analysts who now project further downside, with some targeting the $86,000 level as the next significant support.
**Debate on Liquidity and Macro Factors**
Investor and financial educator Robert Kiyosaki attributes the current downturn to low liquidity. He believes that both crypto and precious metal prices are likely to rebound when the government resorts to printing more money to finance budget deficits—a policy move that typically boosts asset prices.
History shows that high liquidity driven by low interest rates and expansion of the money supply can propel asset prices upward, while constrained liquidity and tighter credit conditions often cause markets to stagnate or fall.
While the United States Federal Reserve has begun to lower interest rates, only about 44% of traders currently expect a rate cut in December, according to data from the Chicago Mercantile Exchange (CME). This uncertainty over monetary policy continues to weigh heavily on both crypto assets and broader risk sentiment.
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*Related: ‘Volatility is your friend’: Eric Trump not bothered by Bitcoin, crypto carnage.*
https://cointelegraph.com/news/crypto-fundamentals-strong-despite-market-rout