PANews reported on November 17th, citing PR Newswire, that Fundstrat co-founder and BitMine chairman Tom Lee stated that cryptocurrency prices have not recovered since the October 10th liquidation event, and the current continued weakness suggests that market makers' balance sheets may have been damaged. When balance sheets show a "gap," market makers seek to raise funds and reduce liquidity operations in the market, which is equivalent to quantitative tightening in the cryptocurrency space and suppresses prices. In 2022, this quantitative tightening effect lasted for 6 to 8 weeks, and a similar situation may be unfolding now. However, he believes cryptocurrency prices have not yet peaked in this cycle. After analyzing five possible cyclical explanations, he identified two as particularly valuable, both suggesting that the cryptocurrency cycle top may still be 12 to 36 months away, unlike past cycles. Following the largest single-day deleveraging event in cryptocurrency history on October 10th, trading volumes are still recovering, which has also impacted related stocks. The fourth quarter is historically a strong season for both cryptocurrency and stock prices, encouraging investors to increase open interest; therefore, trading volumes should improve in the coming weeks.PANews reported on November 17th, citing PR Newswire, that Fundstrat co-founder and BitMine chairman Tom Lee stated that cryptocurrency prices have not recovered since the October 10th liquidation event, and the current continued weakness suggests that market makers' balance sheets may have been damaged. When balance sheets show a "gap," market makers seek to raise funds and reduce liquidity operations in the market, which is equivalent to quantitative tightening in the cryptocurrency space and suppresses prices. In 2022, this quantitative tightening effect lasted for 6 to 8 weeks, and a similar situation may be unfolding now. However, he believes cryptocurrency prices have not yet peaked in this cycle. After analyzing five possible cyclical explanations, he identified two as particularly valuable, both suggesting that the cryptocurrency cycle top may still be 12 to 36 months away, unlike past cycles. Following the largest single-day deleveraging event in cryptocurrency history on October 10th, trading volumes are still recovering, which has also impacted related stocks. The fourth quarter is historically a strong season for both cryptocurrency and stock prices, encouraging investors to increase open interest; therefore, trading volumes should improve in the coming weeks.
Tom Lee: The peak of the cryptocurrency cycle may still be 12 to 36 months away.
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PANews reported on November 17th, citing PR Newswire, that Fundstrat co-founder and BitMine chairman Tom Lee stated that cryptocurrency prices have not recovered since the October 10th liquidation event, and the current continued weakness suggests that market makers' balance sheets may have been damaged. When balance sheets show a "gap," market makers seek to raise funds and reduce liquidity operations in the market, which is equivalent to quantitative tightening in the cryptocurrency space and suppresses prices. In 2022, this quantitative tightening effect lasted for 6 to 8 weeks, and a similar situation may be unfolding now.
However, he believes cryptocurrency prices have not yet peaked in this cycle. After analyzing five possible cyclical explanations, he identified two as particularly valuable, both suggesting that the cryptocurrency cycle top may still be 12 to 36 months away, unlike past cycles. Following the largest single-day deleveraging event in cryptocurrency history on October 10th, trading volumes are still recovering, which has also impacted related stocks. The fourth quarter is historically a strong season for both cryptocurrency and stock prices, encouraging investors to increase open interest; therefore, trading volumes should improve in the coming weeks.
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