Quinn Thompson, Chief Investment Officer (CIO) at Lekker Capital, expressed a strong buy signal for cryptocurrencies amid a landscape fraught with bearish sentiment. in statement Released via social media platform
Lekker Capital, which has carved out a niche in cryptocurrency trading based on macroeconomic indicators, offers an analysis that contrasts sharply with the prevailing market sentiment. Thompson’s comment comes at a time when the broader cryptocurrency community appears to be caught up in pessimism. He expressed concern about the current trend as it has become fashionable among cryptocurrency investors to adopt a bearish stance. “In all my five years in the cryptocurrency space, I have never seen it as ‘cool’ among native crypto investors as it is now, which reflects the cyclical nature of market sentiment,” Thompson noted.
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Thompson pointed to the interactive nature of the market, especially surrounding major events like the launch of ETFs. He reconsidered in the wake of the launch of the spot Bitcoin ETF in the US, which, contrary to bullish expectations, saw the price of Bitcoin fall from $49,000 to $38,000, representing a steep 22% decline in just 12 days. He said the event should serve as a cautionary tale about the market’s tendency to move against consensus expectations.
Addressing the latest market dynamics, Thompson highlighted the significant impact of the sell-off which dampened the sentiment of market participants, discouraging the usual strategies of buying the dips using leveraged positions. “It is clear that this recent sell-off has finally impacted market participants given the lack of long-term leveraged buying,” he noted.
According to him, this scenario paves the way for a market correction that usually follows a pattern of initial slow recovery, stabilization, and then a rapid upward movement once a triggering event occurs. He pointed to the Bitcoin ETF leak in October as a “buy the news” event that realigned market sentiment.
Furthermore, Thompson discussed the forward-looking nature of financial markets, stressing that the cryptocurrency market is no exception. He believes that the market has already adjusted to past events such as the Mt.Gox saga and Bitcoin sales from the US and German governments. “The key thing to remember here is that markets are forward-looking.” Citing Mt. Gox or US and German government oversupply is old news – the market has priced that in. Fear and surrender invite irrational myopia,” commented the IT Director at Lekker Capital.
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Looking to the future, he highlighted several macro and micro economic developments that will impact the market. “On the macro front, this includes the November elections and additional liquidity from the Fed. On the micro front, there is the ETH ETF, Circle IPO, and improved BTC mining profitability thanks to artificial intelligence,” he explained. “These factors are expected to reduce selling pressure (such as shortlists) By mining Bitcoin) and stimulating market sentiment.
Digging deeper into market technicals, Thompson noted that several major indices have reached cycle lows, which historically precede upward movements. “BTC and ETH CME basis, open interest as a percentage of total, and overall relative value are all at cycle lows while the supply of stablecoins is finally growing again,” he noted. This combination of factors, according to Thompson, indicates the possibility of a market bottom forming.
In a bold closing prediction, Thompson forecasts major rally for major cryptocurrencies in the near future. “Personally, I think ETH will reach $7,000 and BTC will make its first attempt to reach $100,000 by the elections in November,” he confidently stated.
At press time, Bitcoin was trading at $60,766.
Featured image from Shutterstock, chart from TradingView.com
