CryptoQuant analysts suggest that Bitcoin may have reached a local bottom following significant liquidation of long positions in the futures market. Despite the ongoing downtrend, reduced selling pressure could indicate potential short-term recovery.
Major Liquidation: A Signal for Reversal?
On October 1, CryptoQuant reported that over 4,000 BTC long positions were liquidated, marking the second-largest liquidation event of 2024. Such high levels of liquidation typically occur during sharp price drops, causing a significant decrease in the number of contracts being bought. This reduction in sell pressure can help stabilize the market.
What's Next for Bitcoin?
While Bitcoin’s price may remain within its current range for the near term, CryptoQuant cautioned that sustained buying power will be essential to reverse the recent downturn. Although the price action has shown signs of stabilization, further buying strength is necessary to confirm any lasting recovery.
The Importance of Current Market Conditions
Despite challenging market conditions, the recent reduction in selling pressure offers a glimmer of hope for Bitcoin bulls. As the market adjusts, investors will be watching closely to see if this local bottom marks the beginning of a potential rally.
Analysts continue to monitor the Bitcoin market situation, evaluating whether the reduced selling pressure may contribute to a short-term recovery of the cryptocurrency's value.
