Bitcoin has had a rough few weeks. It dropped 36% from its recent peak, which left many traders nervous. But BTIG, the global financial service firm, now believes that this fall may have set the stage for a strong rebound. Analyst Jonathan Krinsky wrote in a note to clients, as reported by CNBC, that Bitcoin looks ready to continue its “reflex rally,” possibly taking it back toward $100,000.
Bitcoin may be ready for a big comeback
At the moment, Bitcoin is trading at $92,451.30, and it has gone up almost 10% in the past five days, according to Coin Metrics data. Even so, the cryptocurrency is still down 20% over the past month because of a mix of major economic concerns and shake-ups within the crypto world.
Two technical factors are working in Bitcoin’s favour right now. The first is the oversold condition, which means the recent selling looks extreme and often leads to a short-term bounce. The second is the seasonal pattern. Historically, Bitcoin tends to hit a low around November 26 and then gain momentum through the end of the year. BTIG says this seasonality could help push prices higher into December.
It’s not just Bitcoin showing signs of life. BTIG said that Ether, the second-largest cryptocurrency, may be on its way back toward $3,400 after losing 24% of its value over the past month. It was last trading at $3,075.62, up nearly 13% over the past five days.
Other major cryptocurrencies are also rising. Solana gained 12%, while XRP rose 15% during the same period.
Despite the recent weakness in crypto, two mining companies, Cipher Mining and Terawulf, are actually doing well. BTIG said both firms are showing strong performance even as the overall market has taken a step back. Cipher Mining has jumped 35% since Monday, and Terawulf is up 31% in the same period, after suffering initial drops.
BTIG also suggested that an index that tracks crypto miners has held steady and could still climb another 15% before meeting tougher resistance levels.
Why investors have been selling?
Part of the pressure comes from investors who are stepping away from risky assets and moving their money into safer options like gold. They’re concerned about whether AI-related stocks are getting too expensive, and because AI stocks and crypto often share the same group of investors, tensions in one area spill into the other.
Meanwhile, traders are also taking their time as they go through a bunch of recent US economic reports. The current data suggests mixed outcomes, so it’s not easy to tell what direction the broader market is heading.
Another reason for the sell-off is that long-term Bitcoin holders have been taking some profits. Many of them believe that Bitcoin follows a four-year cycle, with regular updates in the blockchain that make new tokens harder to produce. Because of this, some long-time holders expect price swings and try to act ahead of them.
