Market Stabilization Signals
Bitcoin could extend its recent rebound following an 8% daily gain on Wednesday. Crypto analysts are pointing to signs that suggest a local bottom may already be established. Bitfinex analysts highlighted extreme deleveraging and seller exhaustion as key stabilization factors.
The combination of heavy deleveraging, capitulation among short-term holders, and early exhaustion signals has created conditions for a stabilization phase, according to Bitfinex. This assessment came shortly before Bitcoin rallied nearly 8% on Wednesday, briefly approaching $94,000.
Current Market Conditions
Bitcoin traded at $93,440 at publication time after the sharp Wednesday surge. The leading cryptocurrency now operates on a leaner leverage base, which reduces the risks of sudden liquidation-driven drawdowns.
Roughly $19 billion was erased from an overleveraged market on October 10, triggering a broader sell-off that pushed Bitcoin into a downtrend. The price eventually bottomed near $82,000 on November 21 before beginning its recovery.
Bitfinex stated that the market's remaining leverage appears relatively well-contained, which reduces systemic fragility. This configuration improves prospects for a more stable consolidation phase going forward.
Shifting Sentiment and Cycle Theory
The late-year pullback, followed by a rebound, has shifted sentiment among Bitcoin holders regarding the four-year cycle theory. Many investors previously expected the cycle top around October's all-time high of $125,100.
December historically represents a quieter month for Bitcoin, averaging returns of just 4.69% since December 2013. However, recent price action has diverged from seasonal patterns, with November falling 17.67% despite historically being the strongest month.
Analyst Outlooks
Analyst PlanC emphasized that this Bitcoin cycle differs from past cycles, noting he has warned about these differences for over a year. Quinten Francois stated Bitcoin remains closer to the bottom than the top, while BitMine chair Tom Lee maintains confidence that Bitcoin can reclaim $100,000 before year-end.