Starkiller Says a New Bull Market Is Starting After Closing All Short Positions Last Month

BlockBeats reported on August 21 that crypto investment firm Starkiller said it has high confidence that the digital asset cycle has already bottomed after BTC posted two days of strong gains and the market improved over the past month. The firm also disclosed that it closed all of its short positions last month. Starkiller said BTC and ETH had previously seen peak drawdowns of 54% and 70%, respectively, and that both assets are now back above their 200-day moving averages. It said this is the first time both have cleared that level since the end of the last cycle. Its quantitative model also shows BTC and ETH stabilizing near the 50-day moving average, breaking out with volume, and reclaiming year-to-date VWAP. The firm said the current bear market has lasted about 315 days, close to the historical cycle average. It pointed to two catalysts behind a possible cycle reversal: U.S. regulators pushing ahead with digital asset market rules, and the U.S. Treasury expanding buybacks of longer-dated Treasurys. Starkiller said this is not quantitative easing, but argued that the Treasury’s focus on long-end yields could improve liquidity conditions, and that BTC remains highly dependent on liquidity. For the next cycle, Starkiller said most traditional crypto-native assets may not repeat their last bull run. After the latest round of market shakeouts, it expects investors to focus more on real revenue and protocols that can return value to token holders. It said assets such as HYPE, LIT, PUMP, VVV and DRV, which have actual revenue or value-capture mechanisms, may attract more attention. Tokens without fundamental support, it added, could become short opportunities in the next rally. Starkiller also said BTC may face a short-term pullback near $80,000, a level it said is close to the VWAP of the all-time high. Even so, the firm said it remains highly constructive on stablecoins, tokenization, prediction markets and on-chain perpetual contracts. It added that it is "more bullish than ever" on its long/short liquidity token strategy and its DeFi market-neutral yield strategy.