Bitcoin and Ethereum Surge Over 20%, Investment Firm: Don't Short a Depressed Market

Quantitative investment firm Starkiller Capital announced on Friday that the cryptocurrency cycle has bottomed, stating that Bitcoin and Ethereum are showing the clearest end-of-cycle signals it has ever seen.

Why Does Starkiller Believe the Cycle Has Turned?

In its research report, Starkiller Capital noted that Bitcoin and Ethereum, after declining 54% and 70% respectively, have for the first time reclaimed their 200-day moving averages—the first such occurrence since the end of the previous cycle.

Each time Bitcoin has regained this level, it has marked the end of a bear market.

The firm closed out its entire short position last month, calling it the clearest expression of its conviction.

Bitcoin found support at the volume-weighted average price (VWAP) of the FTX low, where long-term holders defended that level. Following a high-volume breakout above the 50-day moving average, the medium-term model has turned bullish.

At day 315 of the bear market cycle, the timing also falls squarely within the historical average length of prior cycles.

"This was the quietest trading since 2019 until Wednesday," Starkiller wrote. "Never short a depressed market, especially at a cycle bottom," it added.

The Firm's Expectations Going Forward

Starkiller noted that the market may pause around $80,000, which is roughly the VWAP of the all-time high, and that the downward-sloping 200-day moving average may need to be tested from above before the rally can continue.

Geopolitical uncertainty ahead of the U.S. midterm elections provides another reason for consolidation at that level.

Beyond Bitcoin, the firm expects significant dispersion in the market rather than a uniform rise across all crypto assets.

Protocols with revenue streams and token buybacks—such as Hyperliquid Strategies—have clearly outperformed assets without real economic fundamentals this cycle, and Starkiller expects that gap to continue widening.

The firm argues that most crypto-native tokens without genuine revenue will not repeat their performance from the previous cycle.

Key Levels to Watch for Bitcoin and Ethereum

Bitcoin:

$79,500 — This week's high, first resistance level

$82,500 — Weekly supply zone not touched since October 2025

$71,563 — 200-day exponential moving average, breakout retest support level

Ethereum:

$2,447 — Today's high, near-term upside target

$2,128 — 200-day exponential moving average, just reclaimed and needs to hold

$2,000 — 20-day exponential moving average and psychological support level