Market Cycle Analysis: The "Fall Season" of Bitcoin
Morgan Stanley strategists have indicated that the cryptocurrency market has entered what they describe as the "fall season" within Bitcoin's four-year cycle. They are advising investors to secure their profits before a potential "winter" period begins. Denny Galindo, an investment strategist at Morgan Stanley Wealth Management, explained this perspective in a podcast episode titled "Crypto Goes Mainstream."
Galindo highlighted that historical data suggests a consistent pattern of three up-cycles followed by one down-cycle in Bitcoin's price movements. Based on this observation, he urged investors to take profits in anticipation of a crypto winter. "We are in the fall season right now," Galindo stated. "Fall is the time for harvest. So, it’s the time you want to take your gains. But the debate is how long this fall will last and when the next winter will start." This analogy signifies that prominent figures on Wall Street are acknowledging Bitcoin's market rhythm through a cyclical investment framework, comparable to commodity or liquidity-driven macro cycles.
Bitcoin Dip and Technical Bear Market Signals
On November 5th, Bitcoin (BTC) experienced a significant drop, falling below $99,000. This decline breached a key macro indicator and re-ignited discussions about the current state of the market. According to Julio Moreno, head of research at CryptoQuant, this move placed BTC below its 365-day moving average.
The 365-day moving average serves as a technical indicator that generally reflects the market's overall direction. Analysts consider this metric to be a crucial indicator of market sentiment, and the recent drop is widely interpreted as a strong bearish signal. Andri Fauzan Adziima, a research analyst at Bitrue, had previously stated to Cointelegraph that this dip "officially marked a technical bear market."
In addition to the Bitcoin dip, the crypto market-maker Wintermute noted that key drivers of market liquidity have recently stalled. In a blog post, Wintermute identified stablecoins, ETFs, and digital asset treasuries (DATs) as the primary sources of crypto liquidity. The company observed that liquidity inflows across all three of these components have reached a plateau.
Institutional Investor Outlook: Bitcoin as an Inflation Hedge
Despite the current volatility in Bitcoin's price, institutional investors continue to maintain an optimistic outlook. Michael Cyprys, Head of US Brokers, Asset Managers and Exchanges at Morgan Stanley Research, commented in the same podcast that institutional investors have begun to recognize Bitcoin as a valid component within diversified portfolios, even with its inherent volatility.
Cyprys explained that "Some institutional investors view Bitcoin as digital gold or a macro hedge against inflation and monetary debasement," adding that the advent of ETFs has facilitated easier exposure to the asset, though he acknowledged that this perspective remains a subject of debate in the market. He further elaborated that institutional allocations typically involve slower adjustments due to the extensive internal processes, risk committees, and long-term mandates that large investors must navigate.
However, Cyprys pointed out that adoption is gradually expanding as regulatory clarity and ETF infrastructure have reduced entry barriers. He noted that the introduction of spot Bitcoin and Ether ETFs has already brought billions in assets under management (AUM) into the cryptocurrency space. Data from SoSoValue indicates that US spot Bitcoin ETFs currently hold total net assets exceeding $137 billion, with spot Ether ETFs managing an additional $22.4 billion.