BlockTower Capital: top cryptocurrencies are preparing for a bull cycle

Ari Paul, CEO of BlockTower Capital, said that the cryptocurrency industry is currently showing no signs of increased hype and speculation. In his opinion, this indicates that the markets are in a position to continue bullish growth.

«As for the 'features' of cryptocurrencies, we see very low leverage, neutral sentiment, and healthy market positioning.

I believe that comparing the approval of an ETF (exchange-traded fund) to previous events such as the listing of futures in 2017 is a poor analogy; all of these similar events occurred much later in the bull cycle in the context of much more bullish leverage and hype. Inmy opinion, we are in a medium-term bullish trend, with prices likely to be higher in six months," the crypto expert said.

Considering the basic economic side of cryptocurrencies, Paul emphasizes that demand from institutional investors and new users is more than enough to absorb the supply that enters the markets:

«We are currently in a market dynamic of slow institutional adoption and new user adoption. There are also daily outflows from mining, exchange fees, hacker attacks, etc.

All the «overhangs» that I know about for BTC $74,821.35 Bitcoin 1.35% Market capitalization $1.48 trillion VOL. 24 hours $3.96 billion andare quite minor (such as the liquidation of the Celsius ETH holding). I think it’s very likely that demand continues to overwhelm it with similar dynamics as in the last 12 months. Something like SOL $187.05 Solana 1.08% Market capitalization $88.21 billion VOL. 24 hours $1 billion is probably more difficult given how much [збанкрутілої криптобіржі] FTX property has to be liquidated."

In Paul’s opinion, cryptocurrencies are currently in a bull cycle, which is usually seen in the stock and bond markets. In his opinion, insiders and institutions are accumulating digital assets before a big surge in demand for them.

«I would say that bull cycles follow a general pattern that starts with insider buying, then institutional, then retail. I think we are at the beginning and middle of the institutional cycle, judging by the flow of funds and adoption rates,» the analyst discusses.

Paul also says that cryptocurrencies don’t necessarily need a new catalyst to keep moving upward. The expert believes that the existing uptrend is enough to stimulate new rallies:

«From a technical analysis point of view, we are in a medium-term bullish trend, so if I am correct in my assessment of the current dynamics, no catalysts are needed.

It’s a bit like gravity in Einstein’s formulation — in the absence of a force, the natural way for objects to move is in curved space-time. In themarkets, if you are in a bullish or bearish trend, the best bet in the absence of catalysts is that the trend will continue for at least the next additional unit of time."