Felix Hartmann, founder of Hartmann Capital, believes the crypto market may be near a bottom, pointing to extended negative funding rates and bearish sentiment as indicators. “I might be early, but it feels like we’re near the bottom,” he posted on X on Feb. 8. He noted that crypto funding rates have remained negative for a while, meaning there are more sellers than buyers. Historically, this has been a sign of a market bottom and the potential for a turnaround. He also highlighted that quality altcoins have fallen back to long-term trendlines, wiping out gains made in late 2024.

Ethereum, which was trading above $4,000 in December, has dropped to $2,639. Solana, which hit a record $295 on Jan. 19, is now at $201.15. The overall market cap for meme coins declined by 32.38% by the end of December. Crypto analyst Matthew Hyland has suggested that altcoins are unlikely to reach their December highs for at least two months.

Sentiment in the market has also weakened. The Crypto Fear & Greed Index, which tracks investor sentiment, has fallen to 46 from last week’s 60. Hartmann described sentiment as “absolutely wrecked,” while analyst Mike Alfred said in a Jan. 21 post that this kind of fear has often preceded major market rallies. Bitwise chief investment officer Matt Hougan said retail sentiment is at its lowest in years, but professional investors remain “extraordinarily bullish,” creating a sharp contrast between the two groups.

Hartmann also believes the market’s current choppiness could be nearing its end, as many venture capital token allocations have already been sold off over the past two quarters. Between March and October 2024, $35 billion worth of assets were released through token unlocks, adding supply to the market. With much of that selling pressure absorbed, he sees the potential for stability and recovery.