Originally published on: October 08, 2024
Bitcoin took a near 10% dive last week, leaving many investors worried about the future of the cryptocurrency. However, analysts from Bitfinex have labeled this plunge as a “healthy realignment” that could actually decrease the risk of a sudden crash in the days and weeks ahead.
According to a report released on Oct. 6, Bitfinex analysts suggested that Bitcoin’s drop to the $60,000 support zone, combined with various technical factors, indicates a decrease in volatility. This decline came after Bitcoin surged to $66,600 on Sept. 27, only to face a diminishing market sentiment due to geopolitical tensions and economic concerns.
The recent dip has caused a ripple effect in the market, with open interest in Bitcoin shrinking from $35 billion to a more stable $31.8 billion. Over $450 million worth of long positions were also liquidated during this period, pointing towards a long-biased leveraged positioning in the crypto market.
Despite the recent rebound in Bitcoin’s price to $62,650, the analysts remain cautious about predicting the short-term market direction. They highlighted the importance of monitoring early-week trading sessions in the US for clues about future market movements.
Overall, while the recent dip may have caused some turbulence in the crypto market, Bitfinex analysts believe it has set the stage for a more stable and less volatile environment for Bitcoin traders. With positive US labor data and expected Federal Reserve interest rate cuts in November, the market outlook remains optimistic.
So, despite the uncertainty that comes with trading cryptocurrencies, it seems that Bitcoin’s recent realignment could pave the way for smoother sailing ahead. Stay tuned for more updates on the evolving crypto landscape.
