Bitcoin Climbs Out of the Dip, but the Danger is Far from Over #
Bitcoin has been cautiously rising for over two weeks and has reclaimed a key price level. However, the price continues to face resistance. In a recent market update, Bitfinex analysts warn that the danger for bitcoin is far from over.
Bitcoin Starts the Week with a Rise #
The price of bitcoin showed strength at the end of the weekend. Since Sunday, the price has risen by over 5%. Bitcoin is now worth almost 4% more than a week ago.
With the price increase on Sunday, the price of bitcoin has moved back above the important $90,000 level. For now, the price seems to be finding its footing above this level. At the time of writing, bitcoin is valued at $94,300.
Bitfinex Warns of Weakening Demand #
The recent price increase in bitcoin brings hope, but according to a report from Bitfinex, this is misplaced. On Monday, Bitfinex analysts shared a market update, stating that demand for bitcoin is weakening and the risk of a price decline is present.
Bitcoin is entering a phase where weakening spot demand and ongoing structural weakness converge. This reveals a market that is stabilizing, but is far from healthy, according to Bitfinex.
The structural weakness mentioned in the report relates to bitcoin’s price movements. While other markets, such as various stocks, are trading near highs, bitcoin is moving in a narrow price range well below its record high.
5 to 7 Million Bitcoin in the Red #
The weakening demand and price structure are not the only reasons why Bitfinex analysts warn of potential price declines. Currently, a large number of traders are at a loss with bitcoin. In the current price range, this concerns 5 to 7 million bitcoin that are in the red.
The more traders that are at a loss, the greater the risk of selling pressure. However, this does not always mean the price will fall. The last time such a large number of bitcoin investments were in the red was in October 2023. During that period, the price of bitcoin actually rose.