BitMine Chairman Tom Lee and Bitwise Asset Management CIO Matt Hougan have suggested that Bitcoin (BTC) could be nearing the bottom as early as this week.
This comes as Bitcoin extended its downward trend today, dropping to a seven-month low in early trading hours in Asia.
Sponsored Sponsored
Is Bitcoin ready for a recovery?
Earlier today, Bitcoin fell below $90,000, deepening a decline that has lasted for more than two months and erasing gains heading into 2025. The flagship cryptocurrency is currently 29% below its October 6th all-time high (ATH).
At the time of writing, it was trading at $89,973, with a daily loss of 5.47%. This correction shook market confidence and caused extreme fear in market sentiment.
BitMine Chairman Lee explained that the recent decline in the cryptocurrency market is mainly related to two major factors. The first was a major liquidation event on October 10th. He said this is the largest in the history of the industry.
Second, investors are becoming increasingly anxious ahead of the Federal Reserve’s meeting in December. Cryptocurrencies are considered risk-on assets, so when the Fed signals a hawkish tone, sentiment tends to become volatile and prices tend to fall.
Despite the pressure, Lee said there are signs the stock market decline may be losing momentum. The executive told CNBC:
Sponsored Sponsored
“I think the good news is that there are signs of depletion. I spoke with Tom DeMark of DeMark Analytics and you know he thinks there are signs that there could be a bottom out this week.”
Bitwise’s Hogan shared this view, saying he “exactly” agreed with Lee’s assessment. In his view, the recent economic downturn presents a strong buying opportunity for long-term investors, he added.
“Before this broad market pullback, Bitcoin was the first to flip. Bitcoin was kind of the canary in the coal mine, signaling that there was some risk for all kinds of risks in assets. I think it’s going to bottom first, and I agree with Tom. We’re very close to that point. So I think this is an exciting opportunity again for people who are looking ahead more than a year,” he said.
On-chain and technical indicators support the possibility of a bottom formation. Earlier this month, BeInCrypto reported that over 28% of Bitcoin’s circulating supply is in losses.
Historically, such high levels have signaled market bottoms. Net Taker Volume was also flashing a similar signal. Additionally, a death cross appeared on the BTC chart as the 50-day moving average fell below the 200-day moving average.
“We all know that a ‘death cross’ usually signals the beginning of a bearish trend. But ironically, using the 50-day moving average and the 200-day moving average, this cross has been a consistent bearish signal in 2023, 2024, and earlier this year. “We’re not saying we’re going to go straight to new highs from here, but if history repeats itself, there should be a local bottom and a recovery pump could be just around the corner,” the analyst said. emphasized.
Whether the bottom forms immediately or after a period of consolidation, several technical and historical signals suggest that this correction may be nearing an end. But exactly when the market will see that change remains unclear.
