Did Bitcoin (BTC) Enter a Bear Market After Sharp Declines in October and November? Analysis Firm Explains in Detail!
Bitcoin (BTC) and altcoins experienced sharp declines, with BTC falling below $100,000. Despite increased bearish sentiment, K33 Research's Vetle Lunde claims BTC is in a consolidation phase after massive liquidations, not entering a bear market. Lunde attributes the decline to limited liquidity and fear following the October 10 deleveraging event. He noted the BTC futures premium on CME hit its lowest point since the 2023 US banking crisis, reflecting cautious investor sentiment. Lunde views the current phase as a typical consolidation period, with decreasing long-term investor sell-offs and fading liquidation effects. He anticipates improved investor sentiment and a return to a bullish trend once the market stabilizes.
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Bitcoin Price Falls Below Critical Level
In the face of the sharp and sudden declines in Bitcoin (BTC) and altcoins, the BTC price fell below the critical level of $100,000. While bearish rhetoric intensified after this decline, one analyst argued that BTC was consolidating after mass liquidations and had not entered a bear market.
Expert View on Bitcoin's Market Consolidation
Speaking to The Block, K33 Research president Vetle Lunde stated that after large-scale leverage liquidations, a potential bottom has formed in Bitcoin, with the price entering a consolidation phase. Lunde emphasized that K33 Research referred to October as 'Rotten October', citing limited liquidity and a fear-driven atmosphere that followed the historic deleveraging event on October 10.
Market Indicators Reflect Cautious Sentiment
The analyst highlighted that the BTC futures premium on the CME has fallen to its lowest level since the US regional banking crisis in 2023, signaling cautious investor sentiment. According to Lunde, this market structure indicates a typical consolidation period rather than the onset of a bear market.
The Process of Eliminating Excessive Leverage
Lunde described the current phase in Bitcoin as a process of eliminating excessive leverage. He noted that once this phase is completed, the market could potentially witness a major rally characterized by sharp volatility and stagnant trends. Additionally, selling pressure from long-term Bitcoin investors is gradually decreasing, while the effects of liquidations are fading.
Potential Return to Bullish Phase
Lastly, Lunde argued that as the BTC sell-off stabilizes, investor sentiment is likely to improve, potentially pushing the market back into a bullish phase. He commented on the importance of this transition, which could pave the way for the next significant market rally.
This is not investment advice.