The crypto market seems to be in utter shambles at the moment.
Background
- Bitcoin is trading at the brink of $92.9k
- Over the past week, the market’s largest asset has lost more than 6% of its value
- Traders and investors seem to be waiting for a directional bias to solidify in order to take further action
Why should you pay attention?
- With 'trading paralysis' sweeping the markets, crypto trading volume has shrunk of late
- Top projects across Layer 1s, Layer 2s, meme coins, and AI last saw this low level of trading in early November last year
- According to analysis platform Santiment, “the lack of excitement is a sign of FUD,” which “increases the probability of rebounds”
Who said what?
- Macro investor Raoul Pal also seems to be on the same page
- Elaborating on why market participants are “saved,” he elaborated,
“Banana Singularity — that is just the phases of how the banana zone tends to play out. You tend to get the first spurt… It then corrects a bit. Everyone freaks out. I mean, it’s ridiculous. It’s literally ridiculous.”
- He added,
“And then you usually get the alt season part. That’s when any moron can make money in anything that [they] hold. That is usually in full throttle. Goes through till let’s say, April”
- And then, in the next phase, it tends to get “more selective” as the narrative revolves around “key themes”
- Right after, comes the phase panic phase everyone asks “has the market topped?” “is that M2 chart going to play out,” “is BTC going down to $75,000,” “that’s the end of the market,” “yada yada yada yada!”
- Pal termed it all to be merely noise
- Drawing parallels to past cycles, he affirmed,
“2017-16 was a near identical setup”
Zooming out
- According to pseudonymous analyst Rekt Capital, Bitcoin is in its “first” price discovery correction at the minute
- Here’s how this phase has been historically characterized:
2013: -75% in 13 weeks
2017: -34% in 3 weeks
2021: -31% in 4 weeks
2025: -15% in 4 weeks thus far
- The analyst pointed out that, 2013 is the clear outlier, and perhaps 2017 and 2021 are better references as a result
- Depth-wise, this current -15% price discovery correction has been “much shallower” by standards of history
- Duration-wise however, history suggests, “this current 4-week retrace may be in its final stages”
- The analyst highlighted that progress will speed up in the parabolic phase
