Despite Mixed Sentiment, Analysts Say Market Bottom May Be In and Better Times Ahead

  • A Bitfinex report suggests a market bottom despite recent Bitcoin price drops, with long-term holders staying put.
  • Mixed ETF signals and broader economic caution reflect uncertain investor sentiment and regulatory challenges.
  • Analyst van de Poppe is selling Bitcoin to leverage altcoin trades, viewing Bitcoin as a stable asset similar to gold.

Despite the recent price drops influenced by short-term holders, long-term investors aren’t selling, a report by Bitfinex reveals – suggesting a potential market bottom and future growth.

However, mixed signals from US and Hong Kong Bitcoin ETFs reflect uncertain investor sentiment. The Hong Kong funds recently saw outflows across all six Ether and BTC funds, which was a first.

Related: Whale Watching: $61M Worth of BTC Gets Transferred After Decade of Inactivity

The Bitfinex analysts added that the wider economy shows caution with falling consumer confidence and business adjustments in response to inflationary pressures.

Consumer Confidence Index (CCI), source: OECD

Bitcoin Correlation with US Equities is Increasing

Analysts at research firm Kaiko added that Bitcoin’s 90-day correlation with US equities increased slightly to 0.17 last week from a low of 0.01 in March.

Bitcoin’s correlation with broader economic indicators – like equities – is significant as it reveals how investors perceive Bitcoin in relation to traditional financial markets. A high correlation suggests Bitcoin is viewed similarly to stocks, reflecting broader investor sentiment and economic conditions, indicating whether Bitcoin is seen as a safe haven or a speculative asset.

BTC correlation with equities, source: Kaiko

The rise comes amidst deteriorating risk sentiment due to macroeconomic and geopolitical factors, influencing the April selloff.

Meanwhile, Bitcoin’s correlation with European equities (STOXX 600) remains nearly zero, and with Chinese equities (CSI 300), it is negative at -0.14, Kaiko added.

Sell All Your BTC!?

In response to current market conditions, analyst Michaël van de Poppe is selling all his Bitcoin, not due to disbelief in the crypto market but to seize trading opportunities with altcoins.

First of all, why am I selling my Bitcoin? That is the most important question. As I mentioned before, Bitcoin is my base pair. So, I don’t believe or I don’t think that I need to make more U.S. dollars because if you look at what Bitcoin is or what gold is, they are inflation hedges.

Michaël van de Poppe

Van de Poppe views Bitcoin as a stable base pair, like gold, that holds its purchasing power amidst fiat currency devaluation. Van de Poppe’s strategy involves leveraging altcoin valuations, which he believes are low compared to Bitcoin, to eventually increase his Bitcoin holdings.

He emphasises that this approach aligns with his high-risk tolerance developed over years of trading cycles, seeing the current market as an optimal time for such trades.

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Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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