Morgan Stanley Cautions Bitcoin May Enter "Fall Season," Advising Investors to Secure Profits

Morgan Stanley strategists have signaled that Bitcoin might be shifting into its “fall season” within its typical four-year market cycle, an anticipated period that could lead to a significant downturn in prices. Investors are urged to consider harvesting profits, particularly as signs of weakening momentum present themselves in the market.

Key Takeaways:

Morgan Stanley warns that Bitcoin is entering its "fall season," recommending that investors take profits to prepare for a potential downturn.
The cryptocurrency has recently dipped below its 365-day moving average, indicating reduced market momentum.
Institutional interest in Bitcoin remains robust despite short-term concerns.

What is referred to as the “fall season” in contribution to Bitcoin’s historical price patterns suggests that the time is ripe for investors to secure gains before a possible “crypto winter” approaches.

Morgan Stanley's Insights on Bitcoin's Market Cycle

During a recent episode of the Crypto Goes Mainstream podcast, Denny Galindo, an investment strategist at Morgan Stanley Wealth Management, discussed Bitcoin’s tendency to follow a “three-up, one-down” cycle, indicating a possible downturn ahead.

“We are currently in the fall season,” Galindo stated. “This is the time to harvest your gains. The big question is how long this season will persist and when the next winter will commence.”

These insights come at a time when Bitcoin is witnessing a decline in price momentum. On November 5, Bitcoin’s value fell below $99,000, dipping underneath its 365-day moving average—a crucial benchmark used by traders to interpret long-term market sentiment.

Julio Moreno, head of research at CryptoQuant, noted that this decline represents a significant shift in market mood. Concurrently, Bitrue analyst Andri Fauzan Adziima described the situation as a “confirmation of a technical bear market.”

Adding to this cautious sentiment, crypto market maker Wintermute reported that market liquidity appears to have stalled, with stablecoin inflows, exchange-traded funds (ETFs), and digital asset treasuries plateauing.

The firm highlighted that these three elements have historically been primary drivers of market activity, but recent months have shown diminishing engagement.

Despite these short-term challenges, interest from institutions in Bitcoin is on the rise.

Michael Cyprys, who leads US brokers, asset managers, and exchanges at Morgan Stanley Research, observed that many large investors are increasingly regarding Bitcoin as “digital gold,” a potential safeguard against inflation and currency devaluation.

“Certain institutional investors see Bitcoin as a macro hedge,” Cyprys remarked, emphasizing that ETFs have made it easier for institutions to invest.

It is important to note that institutional allocations tend to occur slowly, guided by regulatory frameworks and long-standing investment mandates.

According to data from SoSoValue, US spot Bitcoin ETFs currently manage over $137 billion in total assets, while Ether ETFs contribute an additional $22.4 billion.

Analysts suggest that this growing institutional involvement may help mitigate volatility, even as the market enters a cyclical decline.

Bitcoin's Price Struggles Amidst Long-Term Selling Pressure

This November, Bitcoin’s historical price rally seems increasingly unlikely, as the market confronts continuous selling pressure from long-term holders and decreasing institutional interest.

Over the past two weeks, Bitcoin's price has remained confined in a narrow bracket between $106,000 and $116,000, following a significant sell-off in October—suggesting investor uncertainty and an extended consolidation phase.

According to Bitfinex's recent market analysis, long-term holders have significantly increased their sales, distributing approximately 104,000 BTC each month—marking the highest selling rate since mid-July.

Market analysts caution that unless there is a resurgence in ETF inflows or fresh spot demand, Bitcoin may stay within this price range, facing potential downward pressure toward $106,000 or possibly even $100,000.