“I might be early, but it feels like we’re near the bottom,” Hartmann expressed in a post on Feb. 8. He pointed out that funding rates, which ensure a balance between futures and spot market prices, have been in the negative for some time. This indicates a market with more sellers than buyers.

Moreover, he mentioned that “quality alts” have retraced back to their long-term trendlines, erasing the gains made in Q4 of 2024. For instance, Ethereum (ETH) traded above $4,000 in December 2024 and was speculated to retest its November 2021 peak of $4,878. However, it has since retreated to $2,639. Similarly, Solana (SOL) hit a record high of $295 on Jan. 19 but has since fallen to $201.15.

The overall market cap of memecoins also declined by 32.38% by the end of December 2024. Crypto analyst Matthew Hyland suggested that the market might need at least two months, if not more, to revisit the highs seen in December.

According to Hartmann, the overall sentiment in the crypto market is “absolutely wrecked,” which is often a precursor to a rally. The Crypto Fear and Greed Index, a measure of market sentiment, currently reads a “Fear” score of 46, down 14 points from last week’s “Greed” score of 60.

Bitwise’s Chief Investment Officer, Matt Hougan, recently stated that “retail sentiment is the worst it’s been in years.” However, he also highlighted a “massive disconnect” with professional investors, who remain “extraordinarily bullish.”

While Hartmann acknowledged that the crypto market might continue to be volatile, he suggested that we might be at the “tail end” as most unlocked venture capital token allocations have been liquidated over the past two quarters. Between March and October 2024, token unlocks released assets worth $35 billion, significantly increasing the market supply.

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