Bitcoin staged a sharp rebound this week, climbing nearly 8% in a single day as analysts pointed to signs that a local bottom may already be in.
Key Takeaways:
Bitcoin rebounded nearly 8% as analysts flagged signs that a local bottom may be forming. Bitfinex points to “seller exhaustion” after a $19 billion leverage flush reduced market risk. Opinions are split on the cycle, with some saying this run no longer follows past four-year patterns.In a note released Tuesday, Bitfinex said the market is showing “seller exhaustion” following a period of heavy deleveraging and panic-driven exits by short-term holders.
“The combination of extreme deleveraging, capitulation among short-term holders, and early signs of seller exhaustion has created the conditions for a stabilisation phase and a relief bounce,” the firm wrote.
Bitcoin Jumps Toward $94K After $19B Leverage Flush, Bitfinex Says
The comment preceded a rally on Wednesday that briefly carried Bitcoin toward $94,000. At the time of publication, the asset was trading near $91,440, according to CoinMarketCap.
Bitfinex also argued the market is now operating on a “leaner leverage base,” reducing the risk of sweeping liquidations.
That shift follows a violent correction in October, when roughly $19 billion was flushed out of what traders had widely described as an overleveraged setup.
The rout triggered a broader downturn that pushed Bitcoin to lows around $82,000 in late November.
With excess risk wrung out, the exchange said the remaining leverage appears more contained, easing pressure on prices and improving the odds of a steadier consolidation phase.
The late-year bounce is also feeding debate over whether Bitcoin’s well-known four-year cycle is losing relevance.
Under older models, the cycle’s top might already have passed in October, when prices printed record highs near $125,100.
However, the recent rebound has complicated that narrative, with some market watchers arguing the structure of this cycle looks different from its predecessors.
Seasonal patterns offer little clarity. December has historically been one of Bitcoin’s quieter months, delivering an average gain of 4.69% since 2013, figures from CoinGlass show.
Notably this year has already broken with tradition. November, typically the strongest month, closed with a steep loss of more than 17%.
Several analysts remain constructive. Market commentator PlanC wrote on X that “this Bitcoin cycle is NOT like past cycles,” while trader Quinten Francois said the asset is now “closer to the bottom than to the top.”
Cathie Wood Calls Liquidity Rebound for Crypto
As reported, ARK Invest CEO Cathie Wood has forecasted that the liquidity squeeze hitting crypto and AI markets will reverse within weeks, driven by three Federal Reserve policy shifts expected before year-end.
Her firm continues aggressively buying crypto equities during the downturn, deploying over $93 million in a single day this week across beaten-down digital asset stocks.
Speaking during ARK’s November market webinar, she identified three temporary liquidity constraints she expects to ease rapidly through Federal Reserve action and reopened government spending.
Wood expects the Federal Reserve to end quantitative tightening at its December 10 meeting, immediately easing one pressure point.
The government shutdown that caused the Treasury General Account cash buildup has concluded, returning funds to circulation.
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