Crypto's New Run 'Has Legs' as Bitcoin Rises and Policy Momentum Builds

Crypto prices may be approaching a turning point after months of losses. Several recent developments could mark the start of a new bull phase, according to Clear Street analyst Owen Lau.

In a note on Wednesday, Lau said the roughly 44% drawdown in crypto markets between October 10 and February 28 may now represent the end of the latest downturn. If that stretch represented a crypto winter, he wrote, "so be it."

Lau did not provide a specific price target for bitcoin but argued that sentiment and fundamentals have both improved in recent weeks. He pointed to regulatory momentum in Washington, deeper integration between crypto firms and the traditional financial system, and continued institutional adoption.

"The industry may just hit an inflection point, and we believe this run has legs," he wrote.

In Brief

• Bitcoin has risen about 11% over the past week, trading near key resistance around $75,000.
• Analyst Owen Lau argues that the 44% drawdown from October to February may mark the end of the latest crypto winter.
• President Trump's intervention on the CLARITY Act raises the odds of Congressional passage by summer.
• Kraken's banking subsidiary received a Federal Reserve master account, a structural step toward integrating crypto into the U.S. financial system.
• Morgan Stanley amended its spot bitcoin ETF filing to name Coinbase Custody as a co-custodian.
• Some analysts warn of a potential "bull trap," pointing to heavy overhead supply and derivatives positioning.

The Case for a New Bull Market

Lau's optimism rests on three pillars: policy progress, infrastructure integration, and institutional adoption.

On the policy front, President Donald Trump's recent intervention on the stalled CLARITY Act raises the odds that the law wins Congressional passage by the end of the summer. JPMorgan had previously said that such a catalyst could be the spark the digital assets market needs for a rally.

On infrastructure, Kraken's banking subsidiary received a Federal Reserve master account, allowing it direct access to the central bank's payment system. Lau called the move a structural step toward integrating crypto-native institutions into the U.S. financial system.

On institutional adoption, Morgan Stanley recently amended a filing for a proposed spot bitcoin ETF to name Coinbase Custody as a co-custodian alongside Bank of New York Mellon. That move reinforces Coinbase's role in the institutional crypto ecosystem.

Bitcoin's Price Action

Bitcoin has risen about 11% over the past week and 8% in the past 24 hours. The rally has pushed the largest cryptocurrency closer to what many traders view as a key resistance level around $75,000.

The recent gains come despite intensifying tensions in the Middle East, suggesting that crypto markets are becoming less reactive to geopolitical headlines and more focused on structural developments.

The Institutional Angle

Lau covers several major crypto firms, including Coinbase, Circle, and Bullish. He currently has a Buy rating on Coinbase and Bullish, and a Hold rating on Circle.

His positive stance on these companies reflects his broader view that the crypto industry is moving toward greater integration with traditional finance. As regulatory clarity improves and infrastructure deepens, the firms that provide custody, trading, and settlement services are well-positioned to benefit.

The Bull Trap Warning

Not everyone is convinced that the rally marks the start of a sustained recovery. Some traders warn the latest move could turn into a classic bull trap — a brief breakout that attracts buyers before reversing lower.

Analysts have pointed to heavy overhead supply and positioning in derivatives markets as potential risks. Some suggest that a rally into the 72,000to72,000to76,000 range could draw sellers rather than confirm a durable uptrend.

Lau, on the other hand, believes the recent developments could signal a broader shift for the industry. "The industry may just hit an inflection point, and we believe this run has legs," he wrote.

Key Levels to Watch

The $75,000 level is the immediate resistance. A clear breakout above that level with volume would support Lau's bullish thesis. Failure to break through could give weight to the bull trap warning.

On the downside, $70,000 is the first support level. A break below that would suggest the rally is losing momentum and that the bearish view may be correct.

What Traders Should Watch

The CLARITY Act's progress through Congress will be a key indicator. If the bill passes by summer, as Lau expects, it would provide a significant regulatory tailwind.

Kraken's Fed master account is another milestone to watch. If other crypto firms follow, it would signal deeper integration between crypto and traditional banking.

Derivatives positioning is also important. If leverage builds too quickly, it could set up a sharp correction. Lau's view is that the current rally is driven by fundamentals, not speculation, but traders should monitor funding rates and open interest.

Final Summary

Crypto markets may be emerging from a months-long downturn, with analyst Owen Lau suggesting the recent 44% drawdown could mark the end of this latest crypto winter. Bitcoin has risen about 11% over the past week, approaching key resistance near $75,000.

Lau points to regulatory momentum in Washington, citing President Trump's intervention on the CLARITY Act, which raises the odds of passage by summer. Infrastructure integration is advancing, with Kraken's banking subsidiary receiving a Federal Reserve master account. Institutional adoption continues, with Morgan Stanley amending its spot bitcoin ETF filing to name Coinbase Custody as a co-custodian.

Not everyone is convinced. Some traders warn the rally could be a bull trap, pointing to heavy overhead supply and derivatives positioning. Lau, however, believes the industry may have hit an inflection point.

"The industry may just hit an inflection point, and we believe this run has legs," he wrote.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are volatile. Always do your own research before trading or investing.