Bitcoin has extended its recent decline, trading near $65,500 as bearish sentiment grips the broader crypto market. Despite the pullback, Bitwise Chief Investment Officer Matt Hougan believes early indicators of a new Bitcoin bull market are beginning to surface beneath the current weakness.
Hougan points to four major developments that could drive the next crypto rally. The first is the rise of agentic finance. Coinbase recently introduced “Agentic Wallets,” designed to allow autonomous AI agents to manage on-chain transactions independently. These wallets support programmable spending policies, non-custodial identity, and secure permissioned execution. Coinbase also noted that transactions on Base are gasless, enabling users to transact with any token. This innovation could significantly expand blockchain automation and increase Bitcoin and crypto adoption.
Institutional DeFi adoption is another bullish catalyst. BlackRock’s reported plan to launch its BUIDL token on Uniswap marks a major step toward integrating traditional finance with decentralized finance. As part of the initiative, BlackRock will acquire an undisclosed amount of UNI tokens, signaling growing institutional confidence in DeFi infrastructure.
Progress on Bitcoin’s quantum security also strengthens long-term fundamentals. Bitcoin Improvement Proposal 360 (BIP-360) has been merged into the official repository, aiming to protect the network from potential quantum computing threats. Enhanced security upgrades could reassure long-term investors concerned about technological risks.
Tokenization trends further support bullish sentiment. Major financial institutions, including CME, Broadridge, and UBS, recently expanded tokenization initiatives, reflecting accelerating interest in blockchain-based asset issuance.
Meanwhile, on-chain analytics firm Santiment reports deeply negative funding rates across crypto exchanges, signaling extreme short positioning not seen since August 2024. Historically, such conditions have preceded strong price rebounds fueled by short squeezes. In August 2024, Bitcoin surged 83% in the following months after similar bearish positioning.
Adding to market pressure, Bloomberg reports that El Salvador’s Bitcoin holdings have dropped by approximately $300 million amid the recent correction. The losses may complicate negotiations for a $1.4 billion IMF loan and increase bond market volatility.
Despite short-term weakness, institutional adoption, DeFi expansion, quantum security improvements, and tokenization growth suggest that the foundation for the next Bitcoin bull run may already be forming.
