Analyst: Tuesday's sell-off may signal a local bottom

TradingView data shows that the total market value of cryptocurrencies is hovering above 2.7 trillion US dollars, having evaporated nearly 1 trillion US dollars since reaching its peak in December 2024. Multiple indicators suggest that Tuesday's sell-off may signal a local bottom. Andre Dragosch, research director at Bitwise Europe, emphasized that the crypto asset sentiment index has fallen to its lowest level since August, coinciding with the closing of yen arbitrage trades and Bitcoin bottoming out around $49,000. "The crypto asset sentiment index just issued a large number of reverse buy signals for Bitcoin. The flow of funds, on-chain data and generally bearish sentiment for derivatives indicate quite limited downside risk. At these prices, the risk-reward outlook seems quite favorable," Dragosch pointed out.