Leverage Reset and Declining Selling Pressure

A new analysis from Bitfinex highlights that the market has undergone a significant reset in leverage, following what the firm described as substantial “extreme deleveraging.” The rapid unwinding of high-leverage positions, combined with capitulation among short-term holders, appears to have reduced selling pressure and opened the door for stabilization.

These insights surfaced just before Bitcoin rallied toward the 94,000-dollar range. At the time of writing, Bitcoin is trading near 93,000 dollars, according to data from CoinMarketCap.

A More Stable Leverage Structure

Bitfinex analysts argue that Bitcoin is now operating within a “healthier” leverage environment. On October 10, roughly 19 billion dollars in leveraged positions were liquidated, triggering a steep market sell-off that pushed the price down to nearly 82,000 dollars on November 21. Analysts now believe that the remaining leverage is more contained, reducing the risk of further systemic shocks and creating favorable conditions for consolidation.

The sharp correction followed by a notable rebound has led some investors to question the relevance of the traditional four-year cycle. Historically, the cycle top would have been expected near the all-time high of 125,100 dollars reached in October.

“This Cycle Is Not Like Previous Ones”

How Bitcoin will close the year remains uncertain. Data from CoinGlass shows that December has historically been a quieter month, with an average return of just 4.69% since 2013. However, this year’s performance has deviated from typical seasonal patterns. November, usually Bitcoin’s strongest month with an average return of over 41%, ended with a 17.67% decline.

Despite the mixed signals, several analysts still see potential for further upside into 2025. Market commentator PlanC reiterated that “this Bitcoin cycle is not like past cycles,” emphasizing warnings he says he has shared for more than a year. Meanwhile, analyst Quinten Francois believes Bitcoin is “closer to the bottom than the top.”

Tom Lee, chairman of BitMine, remains optimistic as well, expressing confidence that Bitcoin could reclaim the 100,000-dollar mark before the year concludes.

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