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 increased in the face of this decline in BTC, one analyst said that BTC was consolidating after mass liquidations and had not entered a bear market.
Speaking to The Block, K33 Research president Vetle Lunde said that following large-scale leverage liquidations, a potential bottom has formed in Bitcoin and the price has entered a consolidation phase.
Lunde, who stated that K33 Research called October “Rotten October,” attributes the recent decline to the limited liquidity and fear-driven atmosphere that followed the historic deleveraging event on October 10.
The analyst also noted that the BTC futures premium on the CME has fallen to its lowest level since the US regional banking crisis in 2023, reflecting cautious investor sentiment.
Lunde noted that the current market structure is a typical period of consolidation rather than the beginning of a bear market, describing the current phase in Bitcoin as a process of getting rid of excessive leverage before a major rally characterized by sharp volatility and stagnant trends.
Lunde added that selling pressure from long-term investors in Bitcoin is gradually decreasing, and the effects of liquidations are fading.
The analyst last argued that once the BTC sell-off stabilizes, investor sentiment will likely improve, potentially pushing the market back into a bullish phase.
*This is not investment advice.