Bitcoin May Experience a 'Relief Bounce' as Stabilization Signs Emerge: Analysts

Bitcoin has shown a potential for a continued rebound after registering an 8% daily gain on Wednesday. Crypto analysts are suggesting that indications of a local bottom may already be present.

Key Takeaways:

Bitcoin recently posted an 8% gain, indicating a possible rebound.
Analysts suggest signs of a local bottom, influenced by deleveraging and reduced seller activity.
The market is operating on a leaner leverage base, minimizing risks of sudden downturns.
December tends to be a slower month for Bitcoin, yet recent trends have not aligned with historical patterns.
Optimism persists for Bitcoin's potential price recovery, with forecasts of reaching $100,000 by year-end.

Bitcoin May Experience a 'Relief Bounce' as Stabilization Signs Emerge: Analysts

“The combination of extreme deleveraging, capitulation among short-term holders, and early signs of seller exhaustion has created conditions conducive to a stabilization phase and a relief bounce,” noted Bitfinex analysts in a report released on Tuesday.

Current Market Conditions for Bitcoin

Bitfinex also highlighted that the market is now functioning with a “leaner leverage base.” This adjustment may lessen the risk of sudden downturns driven by liquidations.

Cryptocurrencies, Bitcoin Price Bitcoin has decreased by 11.72% over the last 30 days. Source: CoinMarketCap

On October 10, approximately $19 billion was eliminated from what many analysts considered an overleveraged market. This event triggered a widespread sell-off, causing Bitcoin and the overall crypto market to enter a downtrend, with Bitcoin's price reaching a low near $82,000 on November 21.

“This configuration strengthens the case that the market’s remaining leverage is relatively well-contained, reducing systemic instability and enhancing the chances for a more stable consolidation phase,” Bitfinex stated.

The recent price decline late in the year followed by a rebound has led more Bitcoin holders to question the relevance of Bitcoin's four-year cycle, which would have suggested a peak price around its October all-time high of $125,100.

Bitcoin's Cycle: A Distinct Pattern

The conclusion of the year remains uncertain for Bitcoin, especially as December has traditionally been a quieter month with an average return of only 4.69% since 2013, according to CoinGlass. However, recent price movements have defied typical seasonal patterns, with November experiencing a 17.67% drop, despite it historically being one of Bitcoin’s strongest months with an average return of 41.12%.

Some analysts remain optimistic that the upward movement could carry into the next year.

Related: BlackRock’s Fink Calls Bitcoin an ‘Asset of Fear’, Softens Crypto Stance

Bitcoin analyst PlanC posted on X on Thursday, stating, “This Bitcoin cycle is NOT like past cycles.”

“I have been warning you all and explaining this for well over a year now. Hopefully, you were paying attention,” he added.

Another analyst, Quinten Francois, echoed a similar sentiment in a post on X the same day, declaring, “Bitcoin is closer to the bottom than to the top.”

In a recent statement, BitMine chair Tom Lee expressed his confidence that Bitcoin could reach $100,000 before the year's end.

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