Crypto hedge fund manager Daniel Cheung of Syncracy Capital indicates a prolonged period for traders to leverage buying opportunities in the current cycle, despite a sharp decline across the crypto landscape as evident in daily price metrics. Cheung anticipates ongoing intra-month volatility with pullbacks presenting sustained "buy the dip" scenarios lasting longer than market participants might expect.
Cheung asserts that traders are adopting a short-term perspective, frequently seeking to capitalize on profits. Recent data from CoinMarketCap reveals a 5.41% drop in total crypto market capitalization, now standing at $3.44 trillion. In a Dec. 9 communication on X, Santiment, a crypto analysis firm, highlighted significant declines in several altcoins that had been gaining since October, observing a notable plummet in their values.
Among leading cryptocurrencies, the 24-hour steepest declines were recorded by Kaia (KAIA) at a 31.33% drop, Stellar (XLM) falling 28.31%, and Flare (FLR) decreasing by 26.87%. Santiment cautions that an overreaction from retail traders, characterized by rapid offloading of assets, may actually spur an aggressive market recovery, potentially benefiting assets like TRX, AVAX, DOT, ICP, POL, FIL, and TIA.
Swyftx lead analyst Pav Hundal describes the overall market pullback as merely a "blip," noting that traders committed to leveraged longs faced considerable risk when spot market liquidity diminished. Over the preceding 24 hours, CoinGlass reported about $1.58 billion in long positions were liquidated, marking a substantial market event akin to an "extinction event" for leveraged longs.
Cheung emphasizes the inherent challenges of market timing, stating, "timing markets are exceptionally challenging." He recalls previous cycles where the prevailing strategy was one of holding and opportunistic buying during dips. Cheung suggests that the widespread belief in predicting market "tops" may actually signal an enduring upward trend in crypto assets.
Bitfinex analysts predict that future downturns in Bitcoin prices will likely be less severe compared to the recent 10% decline, due to reduced selling pressure following Bitcoin's rise above six figures. "With the decrease in realized profits and sell-side constraints, future declines should be more gradual," stated Bitfinex analysts on Dec. 9.