Bitwise Predicts Strong Crypto Rebound After Extended Market Capitulation
Asset manager Bitwise says the crypto market has likely reached a prolonged capitulation phase and expects a strong rebound ahead. In a research note, Bitwise highlights severe price declines, exchange outflows and low on-chain activity as signs that weak hands have been flushed out. The firm points to historical recovery patterns following similar drawdowns and argues that current conditions—reduced leverage, depressed valuations and concentrated holdings among long-term investors—create a favorable setup for recovery. Bitwise expects renewed institutional interest once macro conditions stabilize and suggests selective buying opportunities for traders, particularly in Bitcoin and large-cap altcoins. The note warns volatility will persist during the recovery and recommends risk management, including position sizing and dollar-cost averaging. Key takeaways for traders: likely market bottom signals, reduced systemic leverage, potential short-term rallies mixed with high volatility, and strategic accumulation of high-conviction assets.
Bullish
Bitwise’s assessment signals a probable market bottom driven by flushed-out weak hands, reduced leverage and depressed valuations—conditions that historically precede recoveries. The recommendation aligns with selective accumulation of large-cap crypto like BTC and major altcoins, and expects institutional interest to return once macro uncertainty eases. Short-term: expect elevated volatility and intermittent rallies; traders should manage risk via sizing, DCA and stop discipline. Long-term: if macro stability and on-chain metrics improve, reduced systemic leverage and concentrated long-term holdings can support sustainable appreciation. Similar patterns were seen after prior capitulation events (e.g., 2018–2019 and 2020 drawdowns) where multi-month bottoms preceded extended bull runs, although timing varied. Therefore the immediate market bias is bullish but conditional on macro and liquidity improvements.