Bitcoin price bounced from a six-month low: what comes next?

Bitcoin price bounced after a six-month low, but weak liquidity and ongoing liquidations keep the market unsure about near-term direction.

Summary

• Bitcoin price hit a six-month low on Sunday before a mild rebound toward 95,500.
• Weak liquidity, ETF outflows, and heavy leverage continue to pressure the market.
• Analysts expect slow or sideways movement unless support holds and conditions improve.

Bitcoin hit a six-month low over the weekend as liquidity thinned across global markets. Bitcoin dropped to the 92,970 range on Sunday and has since climbed back to around 95,500 as of Nov. 17.

The fall erased part of the gains made earlier this year. Data shows heavy liquidations across the crypto market in the past day, with Bitcoin (BTC) carrying most of the impact.

Sentiment has weakened sharply. The Crypto Fear and Greed Index has fallen into the “Extreme Fear” band. Since 2017, four of the last five market cycles reached their lowest points when the index touched these levels. Only 2022 played out differently because fear lasted for months.

Some analysts believe liquidity pressure could ease soon as government spending resumes and pending payments start circulating again. A large stimulus package under review in Japan is another factor traders are watching closely.

ETF outflows and the October overhang

Fading expectations for another rate cut in December have added to the pressure. That mix pushed investors out of U.S. spot Bitcoin ETFs last week, reinforcing downward momentum.

Gold and Bitcoin also moved apart after the record liquidation wave in early October. Gold has outperformed Bitcoin through the past month even though the two moved together earlier this year. Markets still have not recovered from the October sell-off.

Analysts point to heavy leverage and forced unwinds as key drivers of recent losses. Digital assets have shed large value since October, with daily losses stacking up. Current valuations remain below pre-liquidation levels, even though crypto fundamentals have not deteriorated.

More political support emerged for digital assets in recent weeks, but Bitcoin has still continued to drift lower.

Technical pressure and near-term outlook

Bitcoin is now testing key support zones. Traders say the lower support band needs to hold to avoid deeper technical stress. Charts point to a bear phase, but earlier cycles show that deep pullbacks have often come before larger rallies.

Economists also point to a changing macro backdrop, with government functions restored, possible rate cuts ahead, and central bank balance sheet tightening nearing its end.

Even with the current weakness, many analysts believe that the market still has a fair chance of recovering over time.