Despite the ongoing crypto market downturn which fuels concern amid many industry observers, an increasing number of developments suggests that a new bull market could be close, according to a recent analysis by crypto asset trading company Cumberland.

"After a very busy month, price action is consolidating. Given the nature of crypto and the tectonic shifts occurring beneath it, we do not expect this paradigm to last,” the firm said in a Twitter thread presenting its forecast for the crypto markets.

"There are plenty of sources of concern for market participants – volumes and liquidity have dried up and are, by various metrics, on the lows of the year,” according to the business. "While this could be a holiday phenomenon, sentiment is dark - dozens of crypto companies are either severely curtailed or out of business, and the future of the industry is as cloudy as ever. That said, prices have reached a surprisingly buoyant equilibrium which is well off the lows of the year."

Cumberland believes that exploring this dichotomy is crucial to predicting crypto price action. The company’s analysis suggests that, following the euphoric highs reached in 2021, crypto markets spent a large share of this year "realigning with more sober technology valuations."

The subsequent collapses of the Luna stablecoin and major crypto exchange FTX acted as as accelerants of this trend, removing oxygen from the crypto lending markets and pushing liquidations into a vacuum, according to the trading firm.

"In the wake of billions of dollars’ worth of those liquidations and trillions of dollars of lost market capitalization, the next leg of price action is almost entirely dependent upon the question of whether or not there are further firesales to