- Crypto analyst Duncan (@FloodCapital) recently claimed that Bitcoin has hit its market bottom and is on the brink of achieving new all-time highs.
- His insights, shared via X (formerly Twitter), delve into the evolving market trends and core fundamentals signaling a potential bullish shift for Bitcoin and other digital assets.
- Duncan noted, “We’ve swept the range lows, leading to about $300M in long liquidations,” highlighting relatively minor liquidations compared to past events.
Discover how market dynamics and institutional movements are setting up Bitcoin for unprecedented highs in our latest analysis.
Is The Bitcoin Bottom In?
Duncan’s comprehensive review identified underperformance in the crypto market against equities in recent weeks. However, a key development involving Mt. Gox introduced new dynamics. “Yesterday’s Mt. Gox headline provided a reasonable explanation for the recent market behavior,” Duncan noted, pointing to anticipated Bitcoin distributions to creditors as a cause for the temporary market downturn.
Alex Thorn, Head of Research at Galaxy Digital, scrutinized the situation, suggesting the selling pressure might be less severe than feared. Duncan added, “We’ve swept the range lows, leading to about $300M in long liquidations,” contrasted with the $750M liquidations in March and April, indicating a cooling market with reduced altcoin open interest and lower funding rates.
He also commented on the bleak sentiment in the crypto community, noting that despite Bitcoin being less than 20% off its peak, the market’s sentiment is highly negative. This is a stark contrast to the altcoin surge seen in 2021. The influence of ETFs, especially Blackrock’s application in June 2023 when Bitcoin was at $26,000, has funneled more capital into Bitcoin, underscoring its perceived stability over volatile altcoins.
Duncan emphasized Blackrock’s strategic positioning in the crypto market, with its $17 billion in IBIT potentially generating $45 million annually from ETF fees. Such developments signal a growing institutional acceptance of Bitcoin.
Institutional Involvement Driving Bitcoin Momentum
Duncan discussed the potential for a standard 1% Bitcoin allocation across major investment portfolios. Such a shift could create substantial market inflows. “If 1% becomes the global standard allocation to Bitcoin, we have a lot of inflows to go,” he pointed out. He also suggested that not having such an allocation might soon be considered a strategic error, flipping the risk to careers from holding Bitcoin to not holding it, marking a significant paradigm shift in investment strategies.
Ethereum And The Future Of Altcoins
On Ethereum, Duncan showed optimism for the upcoming US spot Ethereum ETF, which he believes could yield higher profitability through higher fees and the added potential of staking revenue. He noted, “Blackrock’s most successful product launch ever is likely to have a sequel with the Ethereum ETF, which could be even more profitable.” Despite low current expectations, Duncan argued that misinformation and underestimation obscure the Ethereum ETF’s true potential.
He pointed out that higher margins and staking could significantly enhance the Ethereum ETF’s profitability, suggesting that real-world assets (RWA) integration on-chain may further boost its appeal.
Conclusion
In summary, Duncan’s analysis underscores an optimistic outlook for Bitcoin and Ethereum, driven by institutional interest and strategic market developments. The anticipated acceptance and adoption of ETFs could mark significant inflows and a bullish turn for cryptocurrencies, setting the stage for new all-time highs.
