Bitcoin [BTC] experienced a bearish turn, dropping below the $61k level from its recent resistance at $65k. However, there seems to be a sense of optimism in the market as BTC is now trading close to $62k.
The second week of the fourth quarter could witness a price correction as profit-takers capitalize on their gains and exit the market. Among those exiting are miners who are starting to offload their holdings as BTC approaches $62k.
For bulls to initiate a sustained rally, it is crucial that the selling pressure from the current cycle bottoms out.
Market Insights: Miner Exodus and Potential Market Reversal
Bitcoin’s recent price movements have shown similarities to August, wherein a push towards $65k was met with rejection, leading to a bearish trend.
In line with this price action, miners have been exiting the market, causing a decrease in reserves from 1.817M to 1.814M during bearish phases.
A pattern similar to what was observed in mid-August has manifested in recent days as well, with miner reserves dropping from 1.814M to 1.811M as BTC retraced from $65k to $60k.
Typically, the departure of weak investors results in a steadier market, offering stronger participants the opportunity to accumulate positions at favorable price levels.
If this trend continues, miners reaching the break-even point could signal a potential market bottom. The exit of weak hands to realize profits might create a window for new investors to buy the dip.
Long-Term Holders Show Confidence in Bitcoin’s Future
Unlike miners who are selling off to mitigate losses, Bitcoin holders with over 155 days in their positions are capitalizing on profits.
The Long-Term Holder SOPR has recorded a higher high, historically inducing FOMO sentiment and sparking expectations of future gains in upcoming cycles.
If long-term holders refrain from panic selling, a minor price correction could pave the way for $61k to become a solid support level, with $64k as the next resistance target for bulls.
The decline from $65k to $60k served as a means to filter out weak investors, allowing stronger holders to increase their positions in the market.
Although the foundation seems strong based on figures, further analysis by CryptoCrypto was carried out to ascertain the authenticity of the recent market rally.
BTC Long Positions Regain Dominance
Recent trends have shown a resurgence of long positions in the derivative market, thwarting short sellers’ attempts to capitalize on Bitcoin’s downward movement.
While this signals a bullish sentiment, it also indicates that the influx of long positions has led to significant liquidations among short sellers.
While a short squeeze scenario cannot be ruled out entirely, this development could potentially mark the beginning of a bullish reversal, eliciting enthusiasm among buyers.
With $61k established as a support level and long positions showing optimism, the focus now turns to maintaining the $62k mark, which could set the stage for a rally towards $64k.
However, monitoring short sellers closely remains crucial for the realization of this upward momentum.