A prominent voice in the crypto market is raising alarms about a potential “massive rotation of capital” that could shift sentiment from stocks back to digital assets like XRP and Hedera’s HBAR. This commentary comes after what the analyst describes as an unsustainable bubble within U.S. equities, compounded by a prolonged bear phase in the crypto market.
The host emphasizes that investors may be underestimating the intricate connections between cryptocurrencies and macroeconomic factors, particularly geopolitical tensions and fluctuating oil prices. In his view, the ongoing hostilities between the U.S. and Iran represent the “single largest negative catalyst” affecting digital currencies today.
Citing recent performance data, the analyst, Levi Rietveld, notes substantial daily losses—XRP fell over 5%, HBAR dropped more than 4%, and Bitcoin experienced a smaller pullback—indicating a broader “risk-off” sentiment among investors. In stark contrast, major indices like the S&P 500 and Nasdaq have reached all-time highs over the past ten weeks, with some large-cap stocks showing extraordinary growth of up to 500% in just a year. Rietveld describes the current situation as an ongoing “great rotation from crypto to stocks,” asserting that the flows favor equities as a “safer growth story.”
The commentary highlights a concerning trend in the cryptocurrency realm: weak inflows, with U.S. spot Bitcoin ETFs experiencing significant net outflows totaling billions over several weeks. Rietveld attributes this trend to a shift in investor capital, suggesting that speculative money remains on the sidelines, favoring traditional stocks over digital tokens.
He traces the current bearish leg of the crypto market back to a significant sell-off on October 3, described as the “10/10 liquidation event,” which reportedly erased tens of billions of dollars from the market in a single day. Since that date, major assets like XRP, HBAR, and Bitcoin have seen consistent downward pressure.
Central to Rietveld’s forecast is the 200-week simple moving average (SMA), a long-term technical indicator. He identifies the critical support level for XRP at approximately $1.19, noting that it is currently just a few cents away from that threshold. Historically, he argues, entering positions in large-cap cryptocurrencies below their 200-week SMA has been advantageous during previous bear markets.
While Rietveld refrains from providing a specific date for a potential market reversal, he outlines a broad timeframe from 2026 to 2027 for what he anticipates will be a significant repricing event in the crypto landscape. He believes that three key conditions need to align for such a transition: a pause or correction in the stock market, easier macro liquidity such as Federal Reserve rate cuts, and crypto-specific developments like wider adoption or the introduction of new ETFs.
He advocates for a dollar-cost averaging strategy into undervalued assets while the market is relatively quiet, warning that chasing prices after significant spikes can lead to unfavorable outcomes for investors. Additionally, he suggests utilizing external yield platforms for idle crypto during this downturn, presenting this as part of his own strategy during the current market lull.
Rietveld’s message to investors is clear: if the equity rally moderates and liquidity shifts back towards digital assets, the movement into select large-cap cryptocurrencies could be swift and dramatic. Those waiting for unequivocal signals may find themselves missing out on what he believes is the most favorable entry point of the current market cycle.
