Analyst says crypto must face ‘flushout’ before next rally

Crypto markets have been under pressure since early November, with Bitcoin (BTC) and Ether (ETH) sliding amid profit-taking and macroeconomic uncertainty. Just a day ago, Bitcoin momentarily slid below $100,000 mark and was exchanging hands at $102,514 at the time of writing, down 1.1% in a day.

Its peers were in the same boat. Ethereum (ETH) was down around 4.5% in a day, trading at $3,340.44, while Solana (SOL) was trading 1.8% lower, exchanging at $158.15.

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The retail 'flushout'

The crypto market may be approaching the final phase of a retail “flushout,” according to Bitwise Chief Investment Officer Matt Hougan.

Speaking in a Nov. 4 interview on CNBC Crypto, Hougan described current conditions as “a tale of two markets.”

On one hand, retail investors are showing “max desperation” after a year of liquidations, leverage blowouts, and failures in yield platforms.

"The market for crypto-native retail is just more depressed than I’ve ever seen it,” he said, adding that most individual investors have lost enthusiasm following months of declines.

On the other hand, institutions and financial advisors continue to express optimism about the long-term potential of crypto as an emerging asset class.

“When I go out and speak to institutions, they’re still excited to allocate,” he said, highlighting that many are drawn to the asset’s strong one-year performance despite recent short-term volatility.

Related: Columbia B-school professor links crypto’s latest crash to 'get rich quick scheme'

Is this a bear market?

Hougan said there are steady inflows from professional investors, suggesting that the current selloff may not signal the start of a prolonged bear market but rather a temporary correction before institutional demand drives the next leg higher.

“I’m optimistic that we rally into the end of the year and into 2026,” he said, predicting that the market will increasingly be driven by institutions that are more keen about what’s going on at a fundamental level.

Hougan believes the downturn is part of a broader sentiment cycle.

“We have to get through this retail flush-out,” he said. “We have to hit bottom from a sentiment perspective. I think we’re very close to that," he added.

This story was originally reported by TheStreet on Nov 5, 2025, where it first appeared in the Trading News & Analysis section. Add TheStreet as a Preferred Source by clicking here.

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