After a phenomenal run in Sept-Nov, crypto market has cooled off recently.
If you missed that huge run, this could be your opportunity to make double or triple digit gains (100%+) in 2025.
But predictably, the same investors who missed the big run and were wishing for a pullback are now worried that the market is entering a bear cycle.
So is this a correction in a bull market (i.e. buy a dip opportunity) or a start of a bear market (i.e. catching a falling knife)?
We believe it's the former and we discussed that in our altFINS VIP group.
Today we go through 4 reasons why we believe that the bull market is intact.
But first, let's look at the pullback in numbers. How far are we from recent 52-week Highs:
As you can see above, average large cap altcoin is down 20-50% from their 52-week High. They have given up a lot their recent gains.
Reason #1: Trend Ratings of (Strong) Up
altFINS' proprietary Trend Ratings show that most of the largest assets are still in an Uptrend on Medium and Long-term basis.
A simple check is whether an asset's price is above or below its 200-day Moving Average.
Reason #2: Quantitative Easing
Global interest rates are declining due to quantitative easing by central banks around the world. In the U.S., the Federal Reserve Bank (Fed) just lowered rates by another 25 basis points.
However, the Fed Chairman (Powell) indicated that there will be fewer rate cuts in 2025 than was expected, which triggered the correction in stock and crypto markets.
But the trend in interest rates is still down, which is positive for valuations of risk assets (stocks, crypto) in 2025.
Reason #3: U.S. Regulatory Easing
There's no chart to share here but it's clear that with a new administration coming into the White House, crypto markets should get some tailwinds instead of headwinds.
Prior SEC Chairman, Gary Gensler, has already announced his resignation. He tried to protect the investors but was toxic to the industry.
Already, we're seeing Coinbase and Robinhood expand coin listings on their exchanges.
Projects like Ripple (XRP) and DeFi projects that were in the SEC's crosshair have ripped higher as the regulatory risk was lifted.
More U.S.-based brokers and exchanges will list digital assets on their platforms, giving mainstream investors access.
And imagine what could happen if DeFi projects start paying out dividends to token holders!!
Reason #4: More ETFs Coming
Bitcoin Spot ETFs were launched in January 2024, which sparked a big run in January through April.
Ethereum Spot ETFs were launched as well and more are expected in 2025 (Solana, HBAR, XRP?).
These will expose digital assets to still more retail and institutional investors in 2025, driving additional demand.
Summary
Recent pullback in crypto markets appears to be a correction in a Bull market rather than a start of a Bear phase of the typical four-year crypto cycle.
We at altFINS believe that this is an opportunity for investors to get another shot at the altcoin season that should peak in mid- to late-2025.