Bitcoin could extend its recent rally after posting an 8% daily rally on Wednesday, with crypto analysts pointing to signs that it may already be hitting the bottom domestically.
“The combination of extreme deleveraging, capitulation by short-term holders, and early signs of seller exhaustion has created the conditions for a stabilization phase and bailout rebound,” Bitfinex analysts said in a report on Tuesday.
The comments came just before Bitcoin (BTC) rose nearly 8% on Wednesday, at one point heading towards $94,000. According to CoinMarketCap, as of the publication of this article, Bitcoin is trading at $91,440.
Bitcoin operates on a “slimer leverage base”
Bitfinex said the market is now operating on a “leaner leveraged basis”, reducing the likelihood of a sudden liquidation market decline.
Bitcoin has fallen 11.72% in the past 30 days. sauce: coin market cap
On October 10th, approximately $19 billion disappeared from what many market participants described as an overleveraged market, sparking a widespread selloff and pushing Bitcoin and the entire cryptocurrency market into a downward trend, with Bitcoin’s price bottoming out at nearly $82,000 on November 21st.
“This configuration reinforces the view that the remaining leverage in the market is relatively well contained, reducing system vulnerabilities and improving prospects towards a more stable consolidation phase,” he said.
The price decline and subsequent rebound in the second half of this year will lead more Bitcoin holders to believe that the four-year cycle is no longer relevant, leaving Bitcoin’s cycle price high near October’s all-time high of $125,100.
Analyst says Bitcoin is “different from past cycles”
December has historically been a slow month for Bitcoin, with the average return since December 2013 being just 4.69%, according to CoinGlass, and it remains unclear how Bitcoin will finish the year.
However, recent price action has not followed seasonal trends, with November declining by 17.67% and yielding a return of 41.12%, despite historically being Bitcoin’s strongest month on average.
Some believe that the increase may continue into next year.
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“This Bitcoin cycle is different from past cycles,” Bitcoin analyst Plan C said in an X post on Thursday.
“I’ve been warning you and explaining this to you for over a year, and I hope you’re paying attention,” PlanC said.
Meanwhile, Bitcoin analyst Quinten Francois said in an X post on the same day that “Bitcoin is closer to the bottom than the top.”
BitMine Chairman Tom Lee recently stated that he is confident Bitcoin can regain $100,000 by the end of the year.
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