Crypto markets are showing early signs of stabilization after a prolonged downturn, according to analysis from digital asset manager Bitwise Asset Management. The firm argues that sentiment metrics, including historically high levels of investor fear, may be pointing toward a market bottom rather than ongoing decline.
In a recent market review, Bitwise noted that the current drawdown in major digital assets resembles past periods of extreme anxiety seen during previous bear markets, such as in 2018 and 2022. However, the firm emphasized that long-term catalysts for growth remain intact, even as prices have struggled.
A key signal highlighted by Bitwise is the contrast between investor sentiment — which remains deeply negative — and several fundamental indicators that have shown resilience. This “divergence” between sentiment and on-chain metrics is historically associated with market troughs, where pessimism is strongest just as conditions begin to improve under the surface.
Despite short-term price volatility, Bitwise’s research suggests that broader ecosystem activity — including stablecoin growth, rising transaction volumes, and strengthening revenues among crypto-native businesses — continues to gain traction. These trends, the firm argues, could support an eventual rebound once sentiment shifts.
Bitwise’s view aligns with other recent industry analysis suggesting that the fourth quarter of 2025 may have already marked the deepest phase of the bear market, with 2026 poised to be a transition year rather than a continuation of steep declines.
While uncertainty remains — and some analysts still see potential downside if macro pressures intensify — Bitwise’s interpretation of “peak anxiety” offers a cautious note of optimism for investors looking beyond the current volatility.
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