Bitcoin Should not Fall Further and Could Rebound According to Bitfinex

Bitfinex announces a potential turning point for Bitcoin. According to experts from the crypto exchange, the derivatives market suggests that Bitcoin prices may have reached a local bottom and are showing signs of stabilization. In a context of constant fluctuations and mixed sentiments among investors, this news could bring a spark of stability and optimism for the future of the queen of cryptocurrencies.

Market indicators reveal Bitcoin stabilization

Bitfinex analysts have observed encouraging signs indicating that the price of Bitcoin may stabilize after a period of intense volatility. After hitting a local low at $53,219 last week due to fears related to Bitcoin sales by the German government and Mt. Gox creditors, the queen of cryptos bounced back above the $57,000 mark. This rebound was accompanied by a significant decrease in price fluctuations.

Derivatives market data show a reduction in the spread between implied and historical volatility, by almost 90%, signaling that traders anticipate a period of more stable prices. Additionally, the short-term holder spent output profit ratio (SOPR) being at 0.97 indicates that these sales are currently at a loss, which could reduce selling pressure and favor price stabilization.

Recently, the German government transferred a large portion of its #Bitcoin holdings to various exchanges, briefly driving the price under $55,000📉

While many attribute the recent sharp drop in #BTC prices to this action, #Bitfinex analysts contend that its market impact was… https://t.co/zt2pdJZBCK

— Tide Groups (@TideGroups) July 9, 2024

Outlook for the Bitcoin market

As Bitcoin shows signs of stabilization, the implications for the market are manifold. Bitfinex analysts note that despite recent fluctuations, long-term holders continue to profit from their positions, which is a positive indicator for the overall health of the market. In contrast, short-term sales, which seem to be waning, suggest that selling pressure could diminish, thus offering a more stable environment for prices.

Additionally, Citi Bank’s forecasts regarding rate cuts by the US Federal Reserve add an extra dimension to this analysis. A series of rate cuts, expected to start in September, could inject a new wave of liquidity into financial markets. This dynamic could translate into renewed interest in risky assets such as Bitcoin, thereby strengthening its position in the market.