CryptoQuant said signs of a possible local bitcoin bottom emerged in October, though confirmation would require renewed demand and exchange-traded fund inflows. Willy Woo described bitcoin’s long-term structure as consistent with an early bull cycle, while Darkfost warned that potential selling pressure was increasing after the price rebounded above $85,000.

CryptoQuant analysts said bitcoin could have been vulnerable to a correction because of high US bond yields, expensive oil, slowing ETF capital inflows and investor profit-taking. According to the analysts, those factors increased the risk of liquidations in leveraged positions.

By October 12, however, signs of a possible improvement had emerged. Markets priced the probability of a US Federal Reserve rate increase in October at about 18%, while Brent crude fell to approximately $103 per barrel from nearly $110, the analysts said.

Reduced political uncertainty after the US midterm elections scheduled for November 3 could provide another supportive factor, according to CryptoQuant. The contest for control of the Senate remained tight.

CryptoQuant sees cautious signs of a bottom

CryptoQuant highlighted three onchain indicators supporting cautious optimism. Bitcoin reserves on exchanges remained low despite the recent price rebound, while apparent demand recovered sharply from deeply negative readings but stayed below zero. Whale holdings rose to around 3 million BTC and remained elevated throughout the price correction.

Analysts said confirming a bottom would require steady ETF inflows, stronger US spot demand and a continued recovery in overall demand. They concluded that the seasonal expectation of a rally known as Uptober did not rule out another correction.

Woo sees bullish long-term structure

Willy Woo pointed to the Puell Multiple, an indicator that roughly reflects selling pressure from bitcoin miners.

Woo said the market’s long-term structure aligned with the early phase of a bull cycle. Local price dynamics, however, indicated sideways movement and consolidation.

Darkfost warns of potential selling pressure

Darkfost said bitcoin had entered a phase of intensifying potential selling pressure. He assessed the trend using the Seller Exhaustion indicator, which combines the share of supply in profit with market volatility.

After bitcoin rebounded above $85,000, the indicator reached a level comparable with readings that signaled local peaks during the current cycle, according to Darkfost. The increase was particularly sharp among short-term bitcoin holders.

Darkfost stressed that the indicator showed potential rather than realized selling pressure. He said further price action would depend on whether demand could strengthen enough to contain a possible correction as volatility declined.

Analysts had previously reported large-scale bitcoin profit-taking during the price decline.

Source: Incrypted