Coinbase: Deleveraging indicates Bitcoin price bottoming out

Significant deleveraging in the cryptocurrency market following record liquidations on October 10-11 may indicate a local bottom in the Bitcoin (BTC) price. This is the conclusion reached by analysts at Coinbase Institutional in their latest report.

Excess Leverage Eliminated

Analysts emphasize that excess leverage has been eliminated in the market, creating a more stable foundation for further growth. Fundamentals remain stable, and institutional investors are gradually returning to the market. Large players are focused on EVM networks, RWAs, and yield protocols, indicating a selective return to risk assets rather than an exit from the market.

Price Forecasts

According to options market data, Bitcoin prices could range between $90,000 and $160,000 over the next 3-6 months, with a moderate upside bias. This is creating optimistic expectations among investors.

Medium-Term Factors

The report also mentions several medium-term factors that could contribute to an extension of the current cycle to 2026. These include:

- Federal Reserve rate cut
- Improving liquidity conditions
- New regulatory approaches

Analysts believe that despite the ongoing fear in the crypto market, the October wave of liquidations could be a prelude to medium- and long-term growth, rather than a weakening. This paves the way for a possible rebound in the fourth quarter.

Recovery Expectations

According to analysts, full market stabilization could take several months. A gradual recovery is expected in the near term, rather than a rapid rise to new highs. This underscores the need for a cautious approach to investing in the current environment.

Mixed Signals

Nevertheless, there are mixed signals in the market. A trader nicknamed Mister Crypto suggested that the current cycle may be reaching its peak, given that the MVRV indicator has reached a downward trendline. He cautions investors: "Don't bet against history."

In Conclusion

Thus, the current situation in the Bitcoin market displays both positive and negative signals. On the one hand, deleveraging and the return of institutional investors create the conditions for growth. On the other hand, uncertainty and possible corrections require careful analysis and a cautious approach to investments. It is important to monitor market changes and adapt your strategies according to new data.