According to crypto analytics firm CryptoQuant, Bitcoin (BTC) may have reached a local bottom following the significant liquidation of long positions in the futures market. Despite the ongoing downtrend and technical indicators pointing to further declines, reduced selling pressure could suggest the potential for a short-term recovery.
Major Liquidation Event Could Signal a Local Bottom
On October 1, CryptoQuant reported that over 4,000 BTC long positions were liquidated, marking the second-largest liquidation event of 2024. Such high levels of liquidation typically occur during sharp price drops, causing a significant decrease in the number of contracts being bought. This reduction in sell pressure can help stabilize the market.
CryptoQuant stated, “The liquidation of long positions may have created a local bottom.” Historically, periods of significant losses and liquidations tend to signal local bottoms, presenting opportunities for short-term rebounds.
What’s Next for Bitcoin?
While Bitcoin’s price may remain within its current range for the near term, CryptoQuant cautioned that sustained buying power will be essential to reverse the recent downturn. Although the price action has shown signs of stabilization, further buying strength is necessary to confirm any lasting recovery.
Despite the challenging market conditions, the recent reduction in selling pressure offers a glimmer of hope for Bitcoin bulls. As the market adjusts, investors will be watching closely to see if this local bottom marks the beginning of a potential rally.
