Market Outlook: Euphoria Levels Not Reached, Suggesting Extended Cycle
Macroeconomist Lyn Alden has stated that a significant downside plunge for Bitcoin and the broader cryptocurrency market is unlikely at this stage. She believes that the market has not yet reached euphoric levels, which diminishes the likelihood of a major capitulation event. Alden suggested that the current cycle could potentially last longer than anticipated because it is driven by broader macroeconomic factors and interest in the asset itself, rather than solely by the Bitcoin halving event. This perspective challenges the notion that the traditional four-year Bitcoin cycle remains intact.
This sentiment aligns with comments from other figures in the crypto industry, such as Matt Hougan, Bitwise chief investment officer. Hougan has also dismissed the four-year cycle theory, suggesting that the market could be poised for several more years of growth.
Divergent Views on Market Corrections
However, not all experts share Alden's view that a major capitulation is off the table. Vineet Budki, CEO of venture firm Sigma Capital, has predicted a Bitcoin (BTC) retracement of 65% to 70% within the next two years.
Alden also commented on general market behavior, noting that outcomes are rarely as extreme as investors might expect. She stated, "It’s usually not as good as people expect and it’s usually not as bad as people expect is often how these things play out."
Recent Market Performance and Sentiment
Bitcoin has experienced a downtrend since reaching new all-time highs of $125,100 on October 5th. It subsequently dropped to as low as $80,700 before a slight recovery. Market sentiment has also declined, as many traders had anticipated year-end strength and potentially new highs, with some, like BitMEX co-founder Arthur Hayes, forecasting a move towards $250,000.
The Concept of Entitlement to Bull Markets
In light of Bitcoin's recent price decline, traders are intensely focused on the timing of the next uptrend. However, Alden advised investors to refrain from viewing bull cycles as guaranteed entitlements. She emphasized, "People kind of get in their mindset where they are owed a bull market. No one is owed a bull market," comparing the cycle's dynamics to watching a cartoon.
Looking ahead, Alden anticipates Bitcoin reclaiming the $100,000 level in 2026. She further predicts that it will either set new all-time highs in the same year or, if not, achieve them in 2027.