After several consecutive months of decline, the pessimistic sentiment in the Bitcoin market may be approaching a turning point. Bitwise Chief Investment Officer Matt Hougan recently told investors that Bitcoin is currently at the bottom range of a six-month adjustment period and that “downside potential is limited.” He noted that the current selling pressure may be nearing its end.
As of Thursday, Bitcoin’s price hovered around $92,000, down more than 25% from the highs above $120,000 set in October. Despite the deep correction, Bitwise still maintains its forecast that Bitcoin will break $200,000 by year-end, though it acknowledges that its earlier market timing was “directionally correct, but the timing was off.”
Hougan pointed out that the scale of selling after Bitcoin fell below the $100,000 mark has been underestimated, and that round-number price levels tend to create emotional resistance, leading to concentrated profit-taking by early investors. He also emphasized that the rapid surge from $74,000 to $126,000 lacked a normal correction, making some profit-taking by investors an inevitable process.
In addition, market concerns about Bitcoin’s “four-year cycle theory” have reinforced selling pressure. Many traders believe that 2025 will mark the cycle’s peak, forming a self-fulfilling pessimistic expectation. Although Hougan argued as early as July that the four-year cycle has weakened, the market remains dominated by the old narrative.
Continuous outflows from Bitcoin ETFs and profit-taking by long-term holders have further exacerbated the recent decline. However, Hougan still sees multiple bullish catalysts forming.
On one hand, Vanguard Group has launched a Bitcoin ETF, opening an investment channel for its 8 million users; Bank of America is allowing advisors to recommend Bitcoin ETFs to clients, unlocking a potential asset pool of over $3.5 trillion. On the other hand, the Federal Reserve is expected to end quantitative tightening in December, which could improve the liquidity environment and support crypto assets.
Hougan concluded that while the market is undergoing a brutal correction, bottoming signals are strengthening: “The year-end market could be very positive, and the downside is already limited.” (DL News)
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