Bitcoin, Ethereum 20% Rallies Are Proof to 'Never Short a Dull Market,' Investment Firm Says

Quantitative investment firm Starkiller Capital on Friday declared that the crypto cycle has bottomed, calling Bitcoin and Ethereum the clearest end-of-cycle setup it has seen.

Why Starkiller Says the Cycle Has Turned?

Starkiller Capital wrote in a research note that both Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are back above their 200-day moving averages for the first time since the end of the last cycle, after peak-to-trough drawdowns of 54% and 70% respectively. 

Every prior time Bitcoin has reclaimed this level, it has marked the end of the bear market.

The firm closed the entire short side of its book last month, a decision it called the clearest expression of its conviction. 

Bitcoin found support exactly at the volume weighted average price (VWAP) from the FTX low, where long-term holders defended that level, and intermediate-term models flipped bullish after a high-volume breakout off a flat 50-day moving average.

At 315 days into the bear market cycle, the timing also falls just inside the average length of prior cycles.

“This was the quietest tape since 2019 in terms of spot volume and volatility, until Wednesday,” Starkiller wrote. “Never short a dull market, especially at the bottom of the cycle,” he added.