Bitcoin may continue its recent upswing after achieving an 8% daily gain on Wednesday, as crypto analysts suggest that a local bottom might already have been established.
“The combination of extreme deleveraging, capitulation among short-term holders, and initial signs of seller exhaustion has set the stage for a stabilization phase and a relief bounce,” Bitfinex analysts stated in a report on Tuesday.
The remarks followed shortly after Bitcoin (BTC) surged nearly 8% on Wednesday, momentarily approaching $94,000. At the time of this report, Bitcoin is priced at $91,440, as per CoinMarketCap.
Bitcoin operating on a “leaner leverage base”
Bitfinex noted that the market is now functioning on a “leaner leverage base,” which lowers the chances of a sudden liquidation-driven market downturn.
On October 10, approximately $19 billion was eliminated from what many market participants characterized as an overleveraged environment, leading to a wider sell-off that drove Bitcoin and the overall crypto market into a downtrend, with Bitcoin hitting a low near $82,000 on November 21.
“This configuration reinforces the notion that the remaining leverage in the market is relatively contained, thereby reducing systemic fragility and enhancing the potential for a more stable consolidation phase,” analysts mentioned.
The late-year price decline, followed by a rebound, has led more Bitcoin holders to believe that the four-year cycle might no longer hold relevance, which would have suggested that Bitcoin’s cycle peak price should be around its October all-time highs of $125,100.
Bitcoin “is not like previous cycles,” analyst remarks
It remains uncertain how Bitcoin will finish the year, particularly since December has historically been a quieter month for Bitcoin, averaging a return of just 4.69% since December 2013, according to CoinGlass.
However, the recent price movements have not adhered to seasonal patterns, with November experiencing a 17.67% decline, despite historically being Bitcoin’s strongest month on average, yielding returns of 41.12%.
Some still hold the belief that the upward trend could persist into next year.
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Bitcoin analyst PlanC commented in an X post on Thursday, “This Bitcoin cycle is NOT like previous cycles.”
“I have been warning everyone and explaining this for well over a year now. Hopefully, you were attentive,” PlanC noted.
Meanwhile, Bitcoin analyst Quinten Francois indicated in an X post on the same day, “Bitcoin is closer to the bottom than the top.”
BitMine chair Tom Lee recently expressed confidence that Bitcoin could regain $100,000 by the year’s end.
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