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Investors are debating whether the market has actually found a bottom.
One voice in that discussion is Brian Armstrong, who argues that the current crypto correction appears to be psychological rather than structural. According to him, persistent fear and uncertainty determine the positioning of investors.
From a sentiment perspective that argument holds some weight. Since the October crash, the Fear and Greed Index has made two consecutive lower lows, with the most recent value falling to an extreme level of 5.
Source: CoinMarketCap
In this setup, any meaningful rebound in crypto would likely depend on when and how sentiment returns to a risky tone, leaving current price action fragile and vulnerable to continued turmoil.
Bitcoin [BTC]for example, has been consolidating around $65,000 for about two weeks.
A decisive breakout from this range could open the way to $60,000 or lower unless investor psychology returns to the neutral-to-greed zone.
The question then naturally becomes: what catalyst could realistically cause a shift in crypto market sentiment strong enough to stabilize price action and restore confidence?
At this stage, analysts appear to be basing their views on a single dominant factor.
The build-up of liquidity heralds the next crypto phase
Stablecoins are often the first signal of a shift in investor psychology.
In this context analysts at CryptoQuant suggest that the US midterm elections could act as a psychological turning point for the crypto market.
In particular, it could accelerate the rollout of key regulatory frameworks and help restore trust in digital assets.
Liquidity already appears to be ahead of broader risk sentiment. The total supply of ERC-20 stablecoins has recovered since 2024 and is now above $150 billion, indicating early capital positioning.
Source: CryptoQuant
According to AMBCrypto, this background supports Brian Armstrong’s vision.
Structural weakness continues to leave the debate over a confirmed market bottom unresolved.
Still, investor positioning alongside resilient liquidity suggests underlying conviction is still on the rise, making the midterm elections a potential trigger for a turnaround in sentiment.
Until then, a strong recovery may be premature.
From a technical point of view, the crypto market A deeper downtrend or continued choppy price action is more likely to occur, reinforcing the idea that this cycle is driven more by psychology than structural strength.
Final summary
- Persistent fear and weak sentiment suggest the current crypto correction is psychological, leaving price action vulnerable unless risk appetite returns.
- The rising liquidity of stablecoins points to early capital positioning, with the US midterm elections seen as a potential trigger for a sentiment shift.