They said cryptocurrency was over... Crypto whales bet 'contrarian' on the final capitulation

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Public opinion surrounding the cryptocurrency market, suggesting "game over," is reaching an extreme. Simultaneously, a contrarian bullish theory has emerged, stating that Ethereum (ETH) and altcoins have entered the final capitulation phase ahead of a macroeconomic shift.

Dan Gambardello, operator of the crypto-focused YouTube channel Crypto Capital Venture, stated in a video uploaded to his YouTube channel on May 27 (local time) that approximately 87% of recent cryptocurrency-related posts on social media were filled with pessimism, such as "the era of cryptocurrency is over." He emphasized that while he cannot definitively predict the next market trend, the interpretation that cryptocurrency is finished is incorrect. He analyzed that the current atmosphere, where even long-time bulls are giving up on Ethereum, resembles the capitulation signals that have been repeated at past cycle lows.

Gambardello attributed the sluggish performance of Ethereum and altcoins not to project failures, but to delays in the economic cycle, as represented by the Purchasing Managers' Index (PMI). He believed that economic cycles and PMI trends better explain the current cryptocurrency market than the four-year cycle theory. He explained that the Middle East war and rising oil prices increased short-term inflation concerns, delaying the recovery of risk asset preference, and as a result, the timing of Ethereum and altcoin rebounds was pushed back.

He mentioned Tom Lee as the most prominent contrarian bull in the current market. Bitmine Immersion Technologies recently purchased an additional $237 million worth of Ethereum and is currently reported to hold 5.39 million ETH. This accounts for approximately 4.47% of Ethereum's circulating supply. Gambardello emphasized that attention should be paid to the trend where large funds are accumulating Ethereum precisely when the majority of investors seem to be leaving it.

Ethereum's fundamentals were also presented as a reason why a bearish outlook alone is difficult to explain. According to the video, while Ethereum's market capitalization is around $256 billion, the scale of stablecoins operating on Ethereum amounts to $322 billion. A bullish argument was also introduced, stating that this volume has grown tenfold in five years and could reach $2 trillion by 2030. The fact that the Ethereum to Bitcoin (BTC) ratio is at a five-year low was also cited as evidence that the price has been overly suppressed compared to its network foundation.

From a technical perspective, the recovery to $2,500 was presented as a key turning point. Gambardello believed that if Ethereum begins to close daily candles above $2,500, near its 200-day moving average, it could be a significant signal for a long-term reversal. Analysis suggests that with the 20-week moving average at $2,200 and the 200-day moving average just below $2,500, recovering this range could quickly change market sentiment. However, he did not rule out the possibility of a drop to $1,500 due to a recent break from a triangular/sideways structure.

Gambardello also suggested the possibility that Ethereum's short-term bearish structure could end as a "false breakout." He predicted that if Ethereum returns to around $2,200, retests the lower trendline, and then recovers to the pattern's center, the pessimism that the cryptocurrency market is over could quickly weaken. He analyzed that when falling oil prices, a PMI rebound, and confirmed economic expansion align, Ethereum and altcoins could become major beneficiaries in the recovery trend of risk assets.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*