Fears of a U.S. recession have grown following a string of disappointing data, especially the jobs report. Cryptocurrencies have fallen more sharply due to their own unique set of negative factors. These include potential selling pressure from Mt. Gox’s initiation of BTC repayments, mixed flows in spot digital asset ETFs, the uncertainty surrounding the election win by crypto-friendly Trump, and reports that a large market maker sold hundreds of millions of dollars in crypto at the peak of the panic.

Despite all the negatives and the market decline, I still believe in the bullish thesis because the core elements remain solid:

Central bank rate cuts: We are at the beginning of global monetary easing. Increased global liquidity has historically been a catalyst for Bitcoin’s gains.

ETF flows: Spot Bitcoin ETFs have attracted $17 billion in net inflows, spot Ethereum ETFs are also overcoming ETHE outflow problems, and securities firms are beginning to allow financial advisors to include cryptocurrencies in their asset allocations, all of which are slowly but steadily driving buy-ins.

Improved U.S. Position: Regardless of who becomes president, there is a stronger bipartisan appetite for clear regulatory frameworks that protect consumers and promote innovation, which will drive more business activity.

Government Bitcoin Strategy: Although the odds are low and would likely require Trump to win, the creation of a US strategic Bitcoin reserve could spark a national Bitcoin war given the potential impact and other countries’ moves in this space.

Global liquidity and Bitcoin price year-on-year growth rate

Although black swan events are always possible, it is difficult for people to identify risks with high probability and high damage. For example:

Risk reduction: Whether it is FTX returning $13 billion to creditors or Mt Gox paying BTC to hacker victims, the shadows of the past market are dissipating. If FTX's compensation can be reinvested in the market and the Mt Gox problem is resolved, these may become catalysts for market growth.

Traditional Market Risks: Financial and economic uncertainty may be waning, with the Bank of Japan indicating it is done raising rates for now, while Goldman Sachs sees only a 25% chance of a U.S. recession (and the Fed promising to address slowing growth).

Other risks: If the US sells its seized $13 billion in BTC, the bankruptcy of centralized exchanges/stablecoins may become more manageable and less risky.

All in all, if these bullish factors come to fruition, risks recede, and cryptocurrencies move toward their ultimate goal, the risk-reward ratio will become very optimistic. Imagine that Bitcoin is no longer "digital gold" but "physical Bitcoin."

A good opportunity to buy at the bottom? It's time to buy

I think the recent drop is a good thing, providing a solid entry point and pushing crypto to the highest risk-reward ratio. The macro environment we are in is very different than before, but it is hard to say what the previously mentioned catalysts will have a significant impact on prices.

While declines are certainly unsettling, they also create a lot of opportunities. And, while there is a lot of negative sentiment following last week’s price crash, judging fundamentals by price often leads to buying high and selling low.

With risks receding and the bullish fundamentals fully in place, the possibility of Bitcoin reaching $100,000 is real, and there is more upside potential after the recent drop, the risk reward has never been so good. It’s time to buy the dip.

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