Bitcoin (BTC) fell to around $79,500 in mid-November after a significant decrease from approximately $106,000, as reported by CryptoQuant. However, a recent rebound toward $88,000 has traders speculating if the market may have marked a local bottom.

Despite this surge, large holders are still offloading their BTC, leading futures markets to exhibit stress levels reminiscent of the FTX collapse in 2022.

Futures Market Dynamics

On-chain analyst Carmelo Alemán stated that Bitcoin’s recent price decline is attributed to “institutional redistribution” and inherent market weaknesses, with the groups holding >10,000 BTC and 1,000–10,000 BTC remaining net sellers.

These large entities, associated with institutional or large trading firms, have been systematically reducing their exposure to Bitcoin. Meanwhile, wallets holding 0–1 BTC and 1–10 BTC have also been liquidating their assets, resulting in minimal retail support.

Interestingly, mid-sized wallets containing 10 to 100 BTC and 100 to 1,000 BTC have stepped in as primary accumulators during the downturn. Alemán highlighted that this demand was instrumental in preventing further price drops after Bitcoin’s significant fall.

However, he cautioned that ongoing selling from the 1,000–10,000 BTC group is hindering a clear trend reversal.

Market watcher Darkfost provided additional insights, indicating that long positions in Bitcoin recently experienced liquidations not seen since the FTX debacle, making comparisons to similar events in October and November of the previous year.

Opinions on Market Direction

Currently, BTC is trading around $88,000, reflecting a 1% increase over the past 24 hours, though it remains down 2% over the week and 21% month-on-month according to CoinGecko. This price is still approximately 30% lower than its previous all-time high above $126,000 achieved in October.

Analysts remain divided on whether the recent dip to $79,500 signifies a cycle low or merely a temporary stop. Crypto Dan noted that the capitulation of short-term holders near the $80,000 mark often signals local bottoms in this cycle. Conversely, CryptoOnchain observed that long-term holders are distributing around 63,000 BTC, indicating a potential wealth transfer occurring at market peaks.

Instead, observers like Sykodelic and Michaël van de Poppe drew parallels between current conditions and the 2020 COVID crash, suggesting that the market could recover even without revisiting previous lows if momentum shifts in the forthcoming weeks. Others, such as Colin Talks Crypto, expressed caution, highlighting various bear market indicators that could emerge even if a final upward movement is still conceivable.