Crypto VC Felix Hartmann suggests market could be near bottom

Felix Hartmann, a crypto venture capitalist, believes the market may be approaching a local bottom, signaling a potential rebound.

Hartmann, the founder of Hartmann Capital, shared his thoughts in a February 8 post, suggesting that the prolonged negative funding rates and pervasive bearish sentiment could indicate the market is nearing its lowest point. 

He explained that funding rates, which help align futures and spot market prices, have been negative for an extended period, with more sellers than buyers.

This ongoing trend often signals a bearish outlook but may also point to a market bottom and the potential for an upward shift. 

In addition, Hartmann noted that many "quality altcoins" have retraced to long-term trendlines, erasing much of the gains seen in Q4 2024.

For instance, Ether (CRYPTO:ETH), which traded above $4,000 in December 2024, has pulled back to around $2,639.

Similarly, Solana (CRYPTO:SOL), which reached a new all-time high of $295 in January, has since dropped to $201.15. 

Hartmann emphasised that despite the market's choppiness, this could be the tail end of the downturn, as most of the unlocked venture capital token allocations have already been dumped in the past two quarters.

Between March and October 2024, token unlocks released $35 billion worth of assets, adding significant supply to the market.

While sentiment remains negative, with the Crypto Fear Greed Index reading "Fear" at 46, Hartmann sees this as a positive signal. He believes that the "wrecked" sentiment often precedes major rallies in the crypto sector.

Other analysts, including Matthew Hyland and Mike Alfred, echo Hartmann's view, suggesting that the current market conditions might set the stage for a sector-wide rally in the coming months.