Looking around Twitter, it seems that the crypto market is anything but bearish.

Friday and Saturday were marked by extremely strong rallies in altcoin prices – despite consolidation in the two leading cryptocurrencies.

Many small-caps, medium-caps and even large-cap altcoins enjoyed gains of 10-50 percent yesterday, leading to a sharp drop in Bitcoin Machine dominance to 65 percent (at the time of this writing). Earlier in the week, the metric was still at 68.5 percent.

But this price action has not convinced all analysts that Bitcoin, Ethereum and the rest of the market are ready to move higher.

Bitcoin in a bear market?

Qiao Wang, a crypto asset investor formerly with Messari and Tower Research, believes Bitcoin (To Buy Bitcoin Cheap Guide) and the crypto market may not be in a full-blown bull market as some have speculated.

He shared on Jan. 15 that he thinks we may be in a „mini bear market“ due to the large amount of speculators, as evidenced by crypto futures market funding rates:

„IMO we are in a mini bear market. Not enough conviction to short, and certainly I think we’ll be much higher in 6-12 months. Would like to see as devaluation as speculators leave and spot buyers enter. I have no idea yet how low we will go, but 20k-25k would hurt both bulls and bears.“

IMO we are in a mini-bear market. Not enough conviction to short, and certainly think we’ll be a lot higher 6-12 months from now. Want to see speculators go away and spot buyers step up as invalidation. No clue yet how low we’ll go, but 20k-25k would hurt both bulls and bears.
– Qiao Wang (@QwQiao) January 15, 2021

To better understand, the Funding Rate is the recurring fee long positions pay to short positions to match the price of a futures market to the price of a spot market. High funding rates often indicate that there are a large amount of leveraged buyers speculating on an asset that will increase in value in a short time frame.

Wang adds that there are many vulnerabilities in the market right now that make it vulnerable to a potential correction:

„I’m still long in some high quality DeFi that I think we will do very well if my BTC thesis is wrong. Either way, there is a lot of fragility in the system. It’s not the time to be a hero.“

His opinion is similar to that of Scott Minerd of Guggenheim. The had stated in a recent interview with Bloomberg that Bitcoin is likely in the midst of a short-term „speculative frenzy“ or mania.

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