Economist Alex Krüger dismissed concerns about the crypto bull cycle ending, arguing that widespread bearish sentiment creates a contrarian buying opportunity as markets prepare for recovery.

In an Aug. 30 X post, Krüger noted that “most crypto charts now look so broken and bearish that is bullish,” citing significant long liquidations as evidence of capitulation.

The economist positioned bullishly for the coming week after experiencing losses earlier in the trading session.

Krüger observed that the recent market decline primarily affected Bitcoin and Ethereum, while altcoins stopped crashing earlier in the session. He added that such divergence often signals upcoming strength,

He emphasized that optimal buying opportunities emerge “when everybody is panicking, and not when we are all celebrating.”

The economist expects market volatility to persist until the Federal Reserve’s next meeting, noting that a rate cut remains incompletely priced into current valuations. Even with potential downside risks, Krüger expressed “extreme confidence that this is not the end of the cycle.”

No blow-off tops for now

When questioned about the longevity of the cycle without a blow-off top, Krüger explained his “super cycle” thesis. This framework envisions key assets continuing higher with “smaller dips and a lower slope” rather than traditional manic runs followed by major corrections.

Krüger does not anticipate a blow-off top in 2025, citing insufficient conditions for major manic moves except possibly for Solana due to accumulating demand.

Furthermore, he projected that changes in the Federal Reserve’s composition in 2026 could trigger the next major bull market peak.

Contrary to bearish commentators who suggest excessive optimism requires crushing, Krüger assessed the current sentiment as balanced, with both bullish and bearish perspectives fairly represented.

‘Statistical nonsense’

He dismissed September’s bearish seasonality as “statistical nonsense” from pattern-seeking behavior rather than meaningful market conditions. He expects trading to alternate between long and short liquidations until Fed policy decisions establish a clear trend.

While acknowledging that a 25 basis point cut would not surprise markets, he questioned whether it could serve as a catalyst that may trigger the blow-off top that many analysts predict.

Krüger then highlighted options skew data showing puts trading at premiums to calls, indicating fear-driven positioning. This technical setup, combined with liquidation-driven selling pressure, creates conditions favoring contrarian positioning.

The economist’s analysis suggests that the current market weakness represents temporary volatility rather than a structural breakdown, positioning the market for recovery as liquidation waves clear weak hands.

Mentioned in this article

Over $1 trillion of a precious and highly desirable metal is ready and waiting to be mined on the moon – and it’s not gold, according to researchers.

A massive pile of platinum has accumulated under the moon’s surface, according to a paper published in the journal Planetary and Space Science.

Lead researcher Jayanth Chennamangalam tells New Scientist that the trillion-dollar estimate stems from findings that around 6,500 lunar craters, each at least 1 kilometer wide, contain significant platinum group metal (PGM) deposits from asteroid impacts.

The study spotlights the commercial potential of resources in space, which could attract private investment and reduce reliance on government funding for space exploration.

And lunar mining could be far more viable than extracting resources from near-Earth asteroids, with the moon offering a vastly larger number of potential mining sites.

Beyond its appeal in jewelry, platinum is coveted for its strength and vital use in high-tech applications, powering everything from clean energy solutions to life-saving medical equipment.

The precious metal’s price has soared this year, climbing over 30% to around $1,400 per troy ounce, driven by a global supply deficit and rising demand from the automotive and jewelry sectors.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Monday’s trading session has declined as one of the most unstable since Covid Crashion in March 2020, showing no impulse to retreat as the US and China counter tariffs global markets get caught up in crossfire.

Just as the equity market went well, volatility spilled into all asset classes. For example, Bitcoin (BTC) has given up to 10% to desirada. But the real focus lies in the yield of the US 10-year Treasury. It’s what is called a risk-free interest rate, and the Trump administration said it wanted to go down as it tries to refinance trillions of citizen debt.

Yields fell to 3.9% from 4.8% last week after President Donald Trump strengthened trade tensions with import tariffs and increased demand for Treasury bills.

Bond prices usually rise, and yields will be lower when Wall Street avoids risk. Unusually, as risk aversion increased on Monday, yields increased, jumping to 4.22%.

The spikes were not limited to the US. The UK has experienced the most sharp rate jump since the Liztrus era pension crisis in October 2022, showing rising globally, indicating increased instability and reduced trust in sovereign debt and currency.

Ole S Hansen, head of Saxobank’s product strategy, pointed to the scale of the long-standing Treasury movement as a sign of something potentially unfolding.

“The US Treasury struggled with a massive sale yesterday. Turbulence has risen the longest since turbulence during the pandemic outbreak. This includes potential signs of large foreign owners, as well as assets sales and resends. From a low of nearly 3.85% the previous day, 4.17%.”

Hansen was fingering in foreign sales, particularly in China, which is said to have offloaded the $50 billion Treasury Department, but Jim Bianco, president of Bianco Research, challenged the story.

“No, foreigners weren’t selling the Treasury to punish the US (Trump),” he wrote, instead pointing to a sharp rally on the dollar index (DXY), rising 2.2% in just three days.

“If China or other foreigners were selling the Treasury… they’ll need to convert those dollars into foreign currency. Otherwise it’s pointless to sell the Treasury and leave money to a US bank.

“This suggests that foreign money had moved to the US. We haven’t left there…the sales were more domestic and we were more concerned about inflation.”

Despite these views, unconfirmed reports on sales in China continue to spread. As of January 2025, China still holds approximately $761 billion in debt from the US government, the largest owner after Japan.

The story of a 10 and 30-year yield surge in Chinese is unconvinced, as most of the official Chinese investment in dollar-induced assets are not long-term instruments, but agent bonds, short-term invoices, and bank deposits.

China is aware that it can gain leverage in the trade war through the holdings of US Treasury notes. That’s not necessarily true.

As the economist and author of “Great Rebalance: The Dangerous Path for Trade, Conflict and the World Economy,” Michael Pettis has long argued.

It’s no surprise that China has brightened its Treasury investment since 2013, with current account surplus peaking during the crash in 2008.

The head of research of market intelligence firm Fundstrat says that the odds of a V-shaped recovery for the stock market in April are overwhelmingly high.

In a new interview with CNBC Television, Tom Lee says that based on historical patterns, the stock market could mount a recovery in early April.

“The spike in the VIX (volatility index) or the collapse in investor sentiment or consumer confidence, that all happened around February 2018, so really that coincided with the first low that was made in 2018, and the market began to stage its recovery…

But as we start to think about the second half of this year, first of all, we’ve already had the collapse in sentiment. We’ve seen $850 billion of cash raised over the past year in money market balances, and then in the second half, we were looking for tax reform, which really propelled stocks in 2017.”

According to Lee, much of the panic in the stock market has already taken place this year, leading him to believe that stocks should start regaining their bullish momentum this week.

“So I think that the odds of a V-shaped recovery in stocks that come after April 2nd is just extremely high, because we’ve already sequenced a lot of the panic that people saw in 2018. I think it’s already taking place.”

A V-shaped rally is a technical pattern indicating an abrupt bullish reversal and a sharp surge in the market.

Earlier this month, both the stock and crypto markets took a hard hit after President Donald Trump announced tariffs and refused to rule out an upcoming economic recession.

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Data shows the sentiment among the Bitcoin traders has deteriorated into extreme fear as BTC has plunged to start the new week.

Bitcoin Has Seen Another Setback To Kick Off Monday

Bitcoin renewed optimism among investors last week as its price showed signs of recovery, but it would appear that the cryptocurrency has decided to start Monday by shattering those hopes.

Below is a chart that shows how the asset’s recent trajectory has looked.

Looks like the price of the coin has been sliding down over the last few days | Source: BTCUSDT on TradingView

As is visible in the graph, Bitcoin was trading around $86,000 just yesterday, but over the past day, the asset has taken a hit that has sent its price down to $82,300.

The rest of the digital asset sector has also printed red returns during this window, although interestingly, Ethereum (ETH) has displayed more strength than the number one cryptocurrency as its price has gone down just around 2%.

With the market-wide downturn, it’s only natural that investor morale would have also been dealt a blow.

Crypto Fear & Greed Index Is Back In Extreme Fear Zone

The “Fear & Greed Index” is an indicator created by Alternative that tells us about the average sentiment present among the traders in the Bitcoin and wider cryptocurrency markets.

The index determines the investor mentality based on the data of the following five factors: trading volume, market cap dominance, social media sentiment, volatility, and Google Trends. It represents the sentiment as a score lying between 0 and 100.

All values under the 47 mark correlate to a sentiment of fear, while those above 53 suggest the investors as a whole are showing greed. The zone in-between these two thresholds corresponds to a neutral mentality.

Besides these three regions, there are also two ‘extreme‘ zones, known as the extreme greed (occurring above 75) and extreme fear (below 26).

The market currently happens to be in the latter of these special regions, as the latest value of the Fear & Greed Index suggests.

The value of the index appears to be 20 at the moment | Source: Alternative

As is visible above, the Bitcoin Fear & Greed Index has a value of 20 right now. Just yesterday, the metric was around the 27 mark, which put the market sentiment in the normal fear zone.

The trend in the Fear & Greed Index over the last twelve months | Source: Alternative

Compared to the low of 15 from earlier in the month, the indicator’s value is still improved even after the plunge. It remains to be seen, however, whether the sentiment would worsen in the coming days or not.

Historically, the extreme regions have held much significance for Bitcoin and other digital assets, as whenever the traders have held these sentiments, the prices have tended to approach a top or bottom.

The relationship has been an inverse one, however, meaning investor despair has led to a bottom and excessive hype has resulted in a top. As such, the latest drop into extreme fear could imply a low may be near for Bitcoin and others.

Featured image from Dall-E, Alternative.me, chart from TradingView.com

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