Bitcoin's Upward Trajectory May Continue as Selling Pressure Eases, Say Analysts

As Bitcoin gradually rises from its recent low of just over $82,000, analysts in the cryptocurrency market express optimism about its continued recovery.

Key Takeaways

Bitcoin has begun to recover from its recent low of $82,000.
Analysts suggest the recent decrease in selling pressure could support further price increases.
A potential second wave of selling may indicate market stabilization.
Recent shifts in Federal Reserve interest rate expectations may boost Bitcoin’s value.
Increased liquidity typically favors high-risk assets like cryptocurrencies.

Crypto market analysts are optimistic that Bitcoin's recovery is on the horizon, following a rise since it dipped to a low of just over $82,000 last Friday. Charles Edwards, founder of Capriole Fund, shared on X that tech stocks and crypto assets suffered significant declines over the last two weeks due to fluctuating expectations surrounding interest rate cuts. He mentioned, “As the market stabilizes, anticipate that it will likely propel Bitcoin higher.”

Additionally, wealth management firm Swissblock highlighted the importance of this week, noting that Bitcoin must “see selling pressure continue to fade.” They cautioned, however, that history often hints at a second, weaker wave of selling. If prices hold near previous lows, it could signify a reliable bottom, indicating that sellers are running out of steam and control is shifting back to bullish traders.

Bitcoin selling pressure is falling. Source: Swissblock

According to TradingView, Bitcoin plummeted to $80,600 on Coinbase last Friday, marking its lowest point since mid-April. The correction from its early October record high above $126,000 has reached 36%.

Bitcoin climb to continue as selling pressure eases: Analysts

Fed Rate Cut Likelihood Rises

Last week, the likelihood of a Federal Reserve rate cut in December dropped to about 30%, but it has since rebounded to around 70%, as reported by Edwards. The CME Fed Watch Tool currently indicates a 69.3% probability of a 0.25 basis point cut during the Fed's meeting on December 10.

Related: Bitcoiners perk up as odds of a December Fed rate cut almost double.

“What a difference two days make in market expectations,” commented an account named "Global Markets Investor," sharing a chart illustrating the rapid shift in predictions on Polymarket.

Fed rate cut predictions flip back toward 70%. Source: Global Markets Investor

Potential for Liquidity Injection

Market analyst “Sykodelic” remarked on Sunday that they would not be surprised to see the Fed announce a “reserves management” strategy at the upcoming meeting, which would effectively indicate a liquidity expansion. They added, “The central bank needs to inject liquidity at some point, or else they could face insolvency.”

Interest rate reductions and increasing liquidity typically have a positive impact on high-risk assets like cryptocurrencies, and past quantitative easing measures have often led to substantial price rallies.

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