The crypto exchange Bitfinex says Bitcoin could mount recovery rallies in the coming weeks if three factors flip favorably for BTC.
In a new report, Bitfinex says that Bitcoin has witnessed shallower corrections this bull cycle, retracing between 18% and 22% before resuming its uptrend.
[adinserter block="1"]However, the crypto exchange notes that BTC has already pulled back by about 30% from its all-time high of around $110,000, deviating from the pattern of shallow contractions and more in line with Bitcoin’s historical bull market retracements.
“If Bitcoin stabilizes around this level, history suggests a strong recovery could follow.”
Bitfinex says that the 30% pullback puts Bitcoin at a “crucial inflection point,” and its potential recovery will likely be determined by three key factors.
“The coming weeks will likely be dictated by ETF (exchange-traded fund) flows, macroeconomic developments, and liquidity conditions. If institutional participation resurges, Bitcoin could regain momentum.
However, if the broader market remains risk-averse, we may see an extended period of range-bound price action and perhaps even more downside.”
At time of writing, Bitcoin is trading for $82,813.
The crypto exchange also tells investors to keep a close watch on the activities of short-term holders (STHs), which Bitfinex defines as entities that have held their BTC for less than 180 days. According to Bitfinex, most STHs are currently underwater and might be forced to capitulate if downward price action persists.
“As BTC continues its second-largest pullback of this cycle, the impact of STH capitulation will be crucial to monitor. If selling from this cohort intensifies, it could reinforce a lower volatility, grind-down scenario, further delaying any meaningful price recovery.
However, if demand from long-term holders or institutional buyers steps in at these lower levels, we could see a stronger price reaction and a reversal in sentiment.”
You can read the full report here.
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