Bitcoin (BTC) Price Surges To $94,0000 – Relief Bounce or Start of New Rally?

TLDR

• Bitcoin rallied nearly 8% on Wednesday, briefly approaching $94,000 after extreme deleveraging created conditions for a relief bounce
• The market is now operating on a “leaner leverage base” following $19 billion in liquidations in October that pushed Bitcoin down to $82,000
• US Spot Bitcoin ETF has recorded five consecutive days of inflows through December 2, with $58.5 million added on the final day
• Technical analysts point to $99,000 as the next major resistance level, with potential targets of $120,000 to $122,000 if cleared
• The Bollinger Band Width indicator has dipped below 100, a historically bullish signal that has preceded past parabolic price surges

Bitcoin’s price jumped nearly 8% on Wednesday, pushing toward $94,000 after weeks of downward pressure. At publication time, Bitcoin trades at $91,440 according to CoinMarketCap data.

The rally follows what Bitfinex analysts describe as “extreme deleveraging” in the market. This deleveraging created conditions for what they call a stabilization phase and potential relief bounce.

The market now operates on a “leaner leverage base” according to the analysts. This reduces the chance of sudden liquidation-driven selloffs.

Bitcoin’s recent troubles started on October 10 when roughly $19 billion was wiped from the market. Many traders described the market as overleveraged at the time.

The selloff pushed Bitcoin into a downtrend that bottomed near $82,000 on November 21. The cryptocurrency is down 11.72% over the past 30 days.

Institutional Interest Returns

US Spot Bitcoin ETF products have recorded five straight days of inflows through December 2. The funds added $58.5 million on December 2 alone.

BlackRock’s IBIT product led the way with $120.1 million in inflows on that day. This sustained institutional buying helped support the recent price recovery.

Bank of America recently recommended that market participants allocate 4% of portfolios to digital assets. Investment adviser Vanguard also added crypto ETFs for Bitcoin, XRP, Solana, and Ethereum to its offerings.

Trading volume for Bitcoin rose nearly 19% to $86 billion during the recent rally. The price ranged between $87,033 and $93,965 over a 24-hour period.

Technical Targets Ahead

Analyst Ali Martinez identified $99,000 as the next major resistance level for Bitcoin price. If the cryptocurrency clears that level, pricing bands suggest the next target sits at $122,000.

Another analyst, Gert van Lagen, points to a rare bullish signal. The Bollinger Band Width has dipped below 100, which has historically preceded parabolic price movements.

Van Lagen’s analysis shows that every previous instance of this signal led to price rallies. His chart suggests a potential move to $140,000.

December has historically been a quieter month for Bitcoin, with an average return of just 4.69% since December 2013. However, recent price action has broken from seasonal patterns.

November fell 17.67% despite being historically Bitcoin’s strongest month with average returns of 41.12%. Analyst PlanC stated that this Bitcoin cycle is not like past cycles.

BitMine chair Tom Lee said he remains confident Bitcoin can reclaim $100,000 before year end. The market configuration now shows relatively well-contained leverage according to Bitfinex.

Bitcoin holders are moving away from the four-year cycle theory. That theory would have placed Bitcoin’s cycle top around its October all-time high of $125,100.

Analyst Quinten Francois said Bitcoin is closer to the bottom than to the top. US Spot Bitcoin ETF inflows reached $58.5 million on December 2.

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