The Bitcoin market is at a critical juncture, with many analysts warning that without a new, powerful catalyst, the leading cryptocurrency is at risk of a "deeper correction." The warning comes as Bitcoin struggles to sustain its upward trend, facing signs of demand exhaustion and increased profit-taking.
On-chain analytics firm Glassnode stated that without a renewed catalyst to lift prices back above $117.1k, the market risks deeper contraction. Historically, failing to hold such critical zones has often preceded prolonged corrections. Currently, Bitcoin is trading at around $110,840.
A primary cause for concern is the increased profit-taking from long-term holders. According to data, long-term holders realized roughly 3.4 million BTC in profit this cycle, a level seen at previous market cycle tops. This, combined with slowing inflows into spot Bitcoin ETFs, suggests a potential market “exhaustion” phase. Indeed, on October 13th, Bitcoin ETFs saw a total outflow of $326 million.
However, not all signs are bearish. Some analysts remain optimistic, pointing to potential positive catalysts. One such catalyst is the prospect of continued rate cuts from the US Federal Reserve, which are generally viewed as bullish for riskier assets like cryptocurrencies. Markets are pricing in about a 95.7% chance of another rate cut at the Fed's Oct. 29 meeting. Furthermore, some analysts believe the market is underestimating catalysts such as governments potentially stockpiling Bitcoin and accelerating institutional investment.
Technical analysts are watching price charts closely. Some point to a “broadening wedge” pattern, which often signals volatility. A failure to hold the crucial $110,000 support level could see a further drop toward the $100,000-$103,000 zone. On the other hand, some analysts remain extremely bullish for the year's end. 21Shares crypto research strategist Matt Mena said Bitcoin is setting up for a potential move toward $150,000, while others, like BitMEX co-founder Arthur Hayes, are forecasting a price of $250,000 by the end of 2025.
In conclusion, the Bitcoin market is in a delicate balance. While the risks of a correction are present, there are also potential catalysts that could propel the price to new highs. Investors are closely watching both technical indicators and macroeconomic developments to determine the market's next move.