Bitcoin Price Rebounds as Bitfinex Flags Seller Exhaustion, Rally Ahead

TLDR

• Bitcoin price rebounded sharply this week, climbing nearly 8% in a single day.
• Bitfinex identified signs of seller exhaustion in the market following heavy deleveraging.
• The market is showing early signs of stabilization and a potential relief bounce.
• Bitcoin briefly reached $94,000 before settling near $91,440 according to CoinMarketCap.
• Bitfinex emphasized that the market is operating on a leaner leverage base, reducing liquidation risks.

Bitcoin price staged a sharp rebound this week, climbing nearly 8% in a single day. Analysts from Bitfinex have pointed to signs of “seller exhaustion” following heavy deleveraging and panic-driven exits by short-term holders. The market now seems to be entering a stabilizing phase with a potential for further relief.

Bitfinex Identifies Seller Exhaustion in Bitcoin Market

In a note released on Tuesday, Bitfinex said that the market is showing clear signs of “seller exhaustion.” This follows a period of intense deleveraging and panic-driven sell-offs.

The comment came ahead of a rally on Wednesday that briefly saw Bitcoin price nearing $94,000. At the time of publication, Bitcoin was trading near $91,440, according to CoinMarketCap. This rally came after a correction in October when Bitcoin price dropped to lows around $82,000.

Leverage Reduction Eases Pressure on Bitcoin Price

Bitfinex also highlighted that the market is now operating on a “leaner leverage base.” This has reduced the risk of widespread liquidations, which had caused major fluctuations in the past. The exchange argued that the reduced leverage is helping to ease pressure on Bitcoin prices, increasing the chances of a steadier consolidation phase.

The violent market correction in October, which wiped out around $19 billion from leveraged positions, seems to have had a lasting impact. Bitcoin price has been more contained since, as the remaining leverage in the market is now more manageable. This shift in the market structure could lead to a less volatile phase in the near future.

Debate Continues Over Bitcoin’s Four-Year Cycle

Despite the recent relief rally, the question of whether Bitcoin’s four-year cycle still holds remains open. Traditionally, Bitcoin cycles have followed a pattern, with the peak occurring every four years. However, this cycle seems to be evolving, and some analysts argue that the recent rebound contradicts the old cycle models.

Bitcoin price touched record highs near $125,100 in October, but the recent pullback has thrown off the traditional narrative. Some market watchers are now suggesting that this cycle is behaving differently than in previous years. However, as December approaches, there is still uncertainty about how the market will perform in the final weeks of the year.

Despite the market fluctuations, ARK Invest CEO Cathie Wood remains optimistic about Bitcoin’s future. She believes that the liquidity squeeze hitting both crypto and AI markets will ease soon. Wood expects three Federal Reserve policy shifts before the year’s end, which could reverse the current liquidity issues.

ARK Invest has continued to deploy capital into digital asset stocks, buying over $93 million worth in a single day. Wood identified three factors quantitative tightening ending, government spending reopening, and a concluded government shutdown that will ease the market pressure.

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