On August 3, CEO and founder of MN Trading, Michaël van de Poppe, shared his insights on the current state of the crypto market, shedding light on the prolonged crypto winter and the struggles faced by altcoins. According to Poppe, altcoin investors are gradually losing faith in the markets as these coins remain stagnant, showing no signs of movement. In fact, altcoin markets have been on a downward trend since May 2021, marking the longest bear market in the history of cryptocurrencies, lasting for over two years.
The extended bear market comes as no surprise, considering the events of 2022, which saw several major collapses and an increasing regulatory crackdown. Regulatory pressure from entities like the Securities and Exchange Commission has posed significant challenges to the crypto industry. Additionally, traditional finance companies are now actively seeking to submit exchange-traded fund applications, further encroaching on the crypto space.
Despite the current downtrend, Poppe remains optimistic that the markets will not continue to decline indefinitely. While many altcoins have been on a downward trajectory for 18 to 24 months, Poppe believes that this phase represents the “boring stage” of the cycle. With the entry of large institutions into the market, a change in trend could be on the horizon.
This bear market has been deemed worse than the previous two by Reflexivity Research founder Will Clemente. The realized cap drawdowns during this Bitcoin bear market surpass those of both 2015 and 2018, indicating significant losses for those who bought at the peak of the previous market cycle.
In terms of volume and volatility, the crypto market is currently experiencing record lows. The 10-day realized volatility for Bitcoin is approaching levels lower than that of stocks, bonds, and gold, highlighting the lack of activity and excitement in the market.
As another week of consolidation comes to a close, the total market capitalization remains at $1.2 trillion. The market has been relatively stagnant since mid-March, with the total cap hovering around this level. Bitcoin is currently trading at a six-week low, showing no significant movement. Ethereum, on the other hand, has been on a downward trend for the past three weeks but has maintained a sideways movement for months, despite the recent surge in ETH ETF applications.
In conclusion, the crypto market is currently facing its longest bear market ever, with altcoins languishing and regulatory pressures looming. However, with the entry of institutional investors and the potential for a change in trend, there is still hope for a market recovery in the future.