Bitcoin may continue its recent upswing after achieving an 8% daily gain on Wednesday, with crypto analysts suggesting indications that a local bottom could already be established.
“The combination of severe deleveraging, capitulation among short-term holders, and early signs of seller fatigue has fostered conditions suitable for a stabilization phase and a relief bounce,” Bitfinex analysts remarked in a report on Tuesday.
The insights emerged just before Bitcoin (BTC) surged close to 8% on Wednesday, momentarily approaching $94,000. As of the time of publication, Bitcoin is trading at $91,440, according to CoinMarketCap.
Bitcoin operating on a “leaner leverage base”
Bitfinex noted that the market is currently functioning on a “leaner leverage base,” which diminishes the chance of a sudden market downturn driven by liquidations.
On October 10, about $19 billion was erased from what many market participants labeled as an overleveraged market, initiating a broader sell-off that drove Bitcoin and the overall crypto market into a downtrend, with Bitcoin’s price hitting a low near $82,000 on November 21.
“This structure reinforces the notion that the market’s remaining leverage is relatively well-contained, lowering systemic fragility and enhancing the chances for a more stable consolidation phase,” he explained.
The late-year price drop, followed by a rebound, led many Bitcoin holders to reconsider the relevance of the four-year cycle, which would have set Bitcoin’s cycle price peak around its October all-time high of $125,100.
Analyst says Bitcoin “is not like previous cycles”
It remains uncertain how Bitcoin will conclude the year, considering December has historically been a quieter month for Bitcoin, with an average return of only 4.69% since December 2013, according to CoinGlass.
However, recent price movements have deviated from seasonal patterns, as November saw a decline of 17.67%, despite historically being Bitcoin’s strongest month on average with returns of 41.12%.
Some still believe that the upward trajectory could extend into the upcoming year.
Related: BlackRock’s Fink designates Bitcoin as an ‘asset of fear’, softens crypto perspective
Bitcoin analyst PlanC stated in a post on X on Thursday, “This Bitcoin cycle is NOT like previous cycles.”
“I have been alerting everyone and clarifying this for over a year now. I hope you were attentive,” PlanC remarked.
Meanwhile, Bitcoin analyst Quinten Francois expressed in a post on the same day, “Bitcoin is nearer to the bottom than to the top.”
BitMine chair Tom Lee recently expressed confidence that Bitcoin could reclaim $100,000 by the end of the year.
Magazine: How Neal Stephenson ‘invented’ Bitcoin in the ‘90s: Author interview
