The crypto market has been experiencing a prolonged winter, causing altcoin investors to lose faith. According to Michaël van de Poppe, CEO and founder of MN Trading, altcoin markets have been in a bear market for over two years, making it the longest existing bear market for cryptocurrencies. This downward trend in the altcoin market is not surprising, given the events of 2022, including major collapses and increased regulatory pressure.
Van de Poppe explains that altcoins have been trending downwards for an extended period of time, with Bitcoin pairs reaching cycle lows and sentiment hitting rock bottom. However, he emphasizes that this does not necessarily mean that the market will continue to decline. He believes that we are currently in the second stage of capitulation, which is the “boring stage” of the market cycle. Despite the current downtrend, the entrance of large institutions into the market could potentially mark a change in trend.
Will Clemente, founder of Reflexivity Research, supports the claim that this bear market is worse than the previous two. In terms of realized cap drawdowns, the losses in this Bitcoin bear market have surpassed those of the 2015 and 2018 bear markets. This indicates that many investors who bought at the top of the previous market cycle have suffered significant losses.
One notable characteristic of the current market is the low volume and volatility. The 10-day realized volatility for Bitcoin is approaching levels lower than those of stocks, bonds, and gold. This lack of volatility indicates a period of consolidation and stagnation in the market.
Total market capitalization has remained at $1.2 trillion, reflecting another week of consolidation. Since the middle of March, the market has been moving sideways, with the total market cap hovering around this level. Bitcoin, in particular, is currently at a six-week low, trading flat at $29,180. Similarly, Ethereum has been down-trending for the past three weeks and has been trading sideways for months, despite the recent surge of ETH ETF applications.
While the current state of the crypto market may seem discouraging, there is hope for a change in trend. The entrance of large institutions, along with regulatory developments, could bring about a shift in market sentiment. While altcoin investors are currently losing faith, it is important to remain cautious and monitor the market closely for any signs of a potential turnaround.
The crypto market is currently experiencing a lengthening crypto winter, with altcoin investors losing faith in the markets. The extended bear market, coupled with low volume and volatility, has created a period of consolidation and sideways movement. However, with the entrance of large institutions and potential regulatory developments, there is hope for a change in trend. It is crucial for investors to remain vigilant and adapt their strategies accordingly in the face of the evolving market conditions.