Author: Martin Young, CoinTelegraph; Translator: Tao Zhu, Jinse Finance
Raoul Pal, co-founder and CEO of Real Vision, stated that the cryptocurrency market is entering the 'banana singularity' zone, or the period where 'everything is rising'.
"Banana zone" is a term created by Pal to describe periods of significant price increases.
"Yes, we are still in the banana zone," macro investor Raoul Pal stated on X on January 10, adding that the first phase of this bull market was the breakout in November last year.
Pal said that following this is the current consolidation period—similar to the 2016/2017 cycle—and added, "This won't last long."
Looking ahead, Pal stated that the next phase of the 'banana zone' is the 'banana singularity'—an altcoin season where 'everything is rising, followed by a larger consolidation'.
Altcoin season typically arrives after a decline in Bitcoin's dominance, according to TradingView data, which currently shows this ratio at 58%.
In another X post on January 10, DeFi researcher '0xNobler' seemed to agree with Pal, telling his 225,000 X followers, "Bitcoin has just entered the acceleration phase," predicting Bitcoin will soar to $500,000, which would "ignite the largest altcoin season in history."
However, futures trader 'CoinMamba' was more pessimistic: "This sell-off is too bad; as long as the price returns to the levels of a week ago, we will welcome altcoin season."
Meanwhile, Pal stated that the third phase of the banana zone is 'core winners breaking out, reaching higher highs or a 'consolidation phase'.
Raoul Pal predicts the 'second phase of the banana zone'. Source: Raoul Pal
Despite the market adjustment this week, the total market capitalization of the cryptocurrency market has grown by 90% year-on-year, rising from about $1.8 trillion to the current $3.4 trillion after spending most of 2024 in a consolidation phase.
Additionally, the total market capitalization reached an all-time high of $3.9 trillion on December 17, 27% higher than the peak of the previous cycle.
Total capitalization of the cryptocurrency market within one year. Source: CoinGecko
Last year, Raoul Pal correctly predicted that the cryptocurrency market would rise in September, after breaking out of consolidation.
"With the increase in global liquidity, cryptocurrencies will rise, and other markets like Nasdaq will also rise," he stated at the time.
In another article on January 10, Pal shared a chart depicting the correlation between Bitcoin and the global M2 money supply, showing similarities to the 2016/2017 cycle when Bitcoin first fell and then rose.
"Everything will be fine. It may go a bit lower, or it may have already finished. Regardless, it will go up over time."
Global Macro Investor (GMI) research director Julien Bittel also predicts Bitcoin will enter the banana zone, stating in June, "Basically, this is the calm zone before the banana zone," after BTC had four months of sideways trading in 2024.
Since the market broke out of consolidation in early November, it has been in the banana zone, accelerated by Donald Trump's presidential election victory.
As of the publication of this article, BTC is still in a pullback, further down 1.3% on the day, trading at $93,370, down about 9% from the weekly high of just over $102,000 on January 7.
