Quinn Thompson, Chief Investment Officer (CIO) at Lekker Capital, has articulated a strong buy signal for cryptocurrencies amid a backdrop rife with bearish sentiment. On a declaration Speaking via social media platform X, Thompson described the current market conditions as “one of the most obvious and compelling crypto buying opportunities in recent memory.”
Lekker Capital, which has carved out a niche in cryptocurrency trading based on macroeconomic signals, provides analysis that stands in stark contrast to the prevailing market mood. Thompson’s comment comes at a time when the broader crypto community appears mired in pessimism. He expressed concern over the current trend where it has become fashionable among crypto investors to take a pessimistic stance. “In all my 5 years in crypto, I have never seen it be as ‘cool’ among native crypto investors as it is now to be bearish,” noted Thompson, reflecting on the cyclical nature market sentiments.
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Thompson highlighted the reactive nature of the market, especially around major events like ETF launches. He revisited the consequences of US Spot Bitcoin ETF launch, which contrary to bullish expectations, saw the price of Bitcoin plummet from $49,000 to $38,000, marking a sharp decline of 22% in just 12 days. This event, he argued, should serve as a warning about the market’s tendency to move against consensus expectations.
Addressing the latest market dynamics, Thompson highlighted the significant impact of the sell-off which has dampened sentiment among market participants, discouraging the usual buy-the-dip strategies with leveraged positions. “It is clear that this latest sell-off has finally impacted market participants given the lack of long-term leveraged buyouts,” he noted.
This scenario, he says, sets the stage for a market correction that typically follows an initial pattern of slow recovery, stabilization and then a rapid upward movement when a catalytic event occurs. He recalled the October BTC ETF leak as a “buy the news” event that realigned market sentiment.
Furthermore, Thompson discussed the forward-looking nature of financial markets, emphasizing that the crypto market is no exception. He believes that the market has already adjusted to past events, such as the Saga of Mount Gox and Bitcoin sales in the US and German governments. “The main thing to remember here is that markets are forward-looking. Citing Mt Gox or US and German government supply overruns is old news – the market has priced it in. Fear and capitulation invoke irrational myopia,” noted the Lekker Capital CIO.
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Looking ahead, he highlighted several macro and microeconomic developments that could influence the market. “On the macro front, this includes elections in November and additional liquidity from the Fed. On the micro front, they are the ETH ETF, Circulate IPO and improve BTC mining profitability thanks to AI,” he explained. These factors are expected to reduce selling pressure (e.g. Bitcoin miners) and reinvigorate market sentiment.
Digging deeper into the technical aspects of the market, Thompson highlighted that several key indicators are at cycle lows, which historically precede upward movements. He noted: “BTC and ETH’s CME base, alternative open interest as a percentage of total, and macro relative value sit at cycle lows while stablecoin supply is finally growing again.” This combination of factors, according to Thompson, signals a potential formation of a market bottom.
In a bold closing prediction, Thompson projected significant rallies for major cryptocurrencies in the near future. “Personally, I think ETH will reach $7,000 and BTC will make its first attempt at $100,000 by the November elections,” he stated confidently.
At press time, BTC traded at $60,766.
Featured image from Shutterstock, chart from TradingView.com