Cryptocurrency expert Duncan, known as @FloodCapital, recently shared his belief that Bitcoin has hit its market bottom and is on track to reach new all-time highs. His analysis, posted on X (formerly Twitter), delves into current market trends and fundamentals that indicate a positive shift for Bitcoin and potentially other cryptocurrencies.
In his detailed analysis, Duncan highlighted how the crypto market had been lagging behind equities in recent weeks. However, a significant development regarding Mt. Gox emerged, which he pointed out as a key factor in the market’s behavior. The anticipation of a large distribution of Bitcoin to creditors led to a temporary market dip.
According to Duncan, the recent market activity resulted in about $300 million in long liquidations, a notable figure but less severe compared to previous liquidation events. He also noted a cooling market, as evidenced by reduced altcoin interest, lower funding rates, and a less bullish options skew.
Despite Bitcoin being less than 20% off its all-time highs, sentiment on Crypto Twitter was described by Duncan as the worst he has ever seen. This negative sentiment stems from the disappointment of crypto enthusiasts who expected a repeat of the altcoin boom seen in 2021, only to encounter a different market dynamic this year.
The influx of capital into Bitcoin has been influenced by ETF developments, particularly Blackrock’s application for an ETF in June 2023. The subsequent approval and inflow of $14.3 billion into the ETF signaled a shift towards Bitcoin, driven by its perceived stability and the structured financial product of ETFs.
Duncan also highlighted Blackrock’s strategic moves in the crypto space, indicating a potential shift towards institutional products and wider acceptance of Bitcoin as a legitimate asset class. He discussed the possibility of a 1% Bitcoin allocation becoming a standard in major investment portfolios, which could lead to significant future inflows.
Regarding Ethereum, Duncan expressed optimism about the upcoming US spot Ethereum ETF, predicting that it could outperform the Bitcoin ETF in profitability due to higher fees and potential staking revenue. He criticized the low expectations surrounding the Ethereum ETF, emphasizing its potential profitability and the integration of real-world assets on-chain.
At the time of writing, Bitcoin was trading at $61,764. The article also featured a chart depicting the BTC price movement, sourced from TradingView.com.