Analyst says crypto must face ‘flushout’ before next rally

Market Overview - Crypto markets have been under pressure since early November, with Bitcoin (BTC) and Ether (ETH) experiencing declines amid profit-taking and macroeconomic uncertainty [1] - Bitcoin momentarily slid below the $100,000 mark, trading at $102,514, down 1.1% in a day, while Ethereum was down around 4.5%, trading at $3,340.44 [1] Retail Investor Sentiment - The crypto market may be nearing the final phase of a retail "flushout," characterized by "max desperation" among retail investors after a year of liquidations and leverage blowouts [2] - The market for crypto-native retail is described as more depressed than ever, with individual investors losing enthusiasm following months of declines [3] Institutional Perspective - Despite the challenges faced by retail investors, institutions and financial advisors remain optimistic about the long-term potential of crypto as an emerging asset class [3][4] - There are steady inflows from professional investors, suggesting that the current selloff may not indicate the start of a prolonged bear market but rather a temporary correction [5] Future Outlook - Optimism exists for a rally into the end of the year and into 2026, driven by institutional demand and a focus on fundamental developments [6] - The downturn is viewed as part of a broader sentiment cycle, with expectations that the market is close to hitting bottom from a sentiment perspective [6]