Key Points
- Bitcoin miners exiting the cycle could signal a market bottom, potentially paving the way for a bull rally.
- Long-term holders (LTHs) appear confident in Bitcoin’s bullish potential, with $61k seen as a crucial support level.
Bitcoin’s recent fall below $61k, from its previous resistance of $65k, has sparked a sense of optimism in the market. At the time of writing, the cryptocurrency is valued at nearly $62k.
The second week of Q4 might witness a price correction, particularly as profit-takers decide to cash in on their gains and exit the cycle. This includes miners who have been capitulating as Bitcoin nears $62K.
Miners’ Exit Could Indicate Market Bottom
A look at Bitcoin’s daily price chart shows that its weekly movement mirrors the price action in mid-August. During that period, a rejection near $65k halted a potential bull run, and miners exited the cycle after five consecutive days of downward pressure.
This trend seems to be repeating itself. Over the past week, as Bitcoin’s value dropped from $65k to $60k, miner reserves saw a significant decline.
Typically, when weaker investors exit the market, it tends to stabilize, allowing stronger hands to accumulate positions at favorable prices. If this trend continues, miners breaking even could signal a market bottom, providing new buyers with ideal dip-buying opportunities.
Long-Term Holders Remain Bullish
Contrary to miners who are capitulating to cut their losses before the market dips further, holders who have held Bitcoin for more than 155 days appear to be selling at a profit.
The LTH SOPR recently made a higher high, which historically has driven positions into FOMO and fueled expectations for future gains in the next cycle.
If LTHs avoid panic selling, a near-term price correction could occur. This would allow the $61k resistance to flip into support, with bulls then targeting the next resistance at $64k.
In summary, Bitcoin’s drop from $65k to $60k was instrumental in shaking off weak hands, establishing $61k as the next support level.
Over the past four days, long positions have regained dominance in the derivative market, preventing short sellers from effectively shorting Bitcoin.
While this is a bullish sign, it also implies that the influx of long positions has put pressure on shorts, leading to significant liquidations.
With $61k confirmed as support and renewed optimism from long positions, bulls are likely to hold $62k next, which could lead to a rally towards $64K. However, for this to materialize, closely monitoring short sellers is essential.
