Crypto market shows sharp divide between sentiment and fundamentals

The cryptocurrency market is currently experiencing a notable divergence between trader sentiment and underlying fundamentals, according to Ari Paul, founder of BlockTower Capital.

In a March 14 post, Paul described the gap as “one of the starkest divergences” he has observed, creating unique opportunities for long-term investors.

While traders and analysts have recently turned bearish amid market uncertainty, developers and crypto companies that are less reliant on short-term market cycles remain optimistic.

Paul noted that many crypto projects report positive developments, suggesting strong fundamentals despite prevailing scepticism.

He expressed confidence in the market’s prospects over a 12-month horizon but acknowledged uncertainty about whether a short-term bottom has been reached.

He emphasised that this environment could favor investments focused on sustainable value creation rather than quick returns.

On March 14, the broader crypto market showed modest gains, offering some relief to traders.

Bitcoin (CRYPTO:BTC) rose 3.16% to $84,638, while Ether (CRYPTO:ETH) and XRP (CRYPTO:XRP) increased by 1.79% and 6.01%, respectively.

The Crypto Fear & Greed Index also climbed 19 points to 46, signaling reduced fear but still falling short of neutral sentiment.

Michael van de Poppe, founder of MN Trading Capital, highlighted Bitcoin’s recent price movements as a potential indicator of an uptrend by mid-2025.

“Clearly made a higher low, clearly touching the highs,” he remarked, suggesting that the asset could resume its upward trajectory in the coming months.

Paul also pointed out that this period might be ideal for exploring traditional venture capital-style investments in the crypto space.

He stressed the importance of focusing on projects with long-term value rather than speculative ventures.

“A good time to be looking for traditional-style VC crypto investments,” he stated.