Bitfinex analysts name the key reason for bitcoin’s fall

Bitcoin BTC $86,484.31 Mezo Wrapped BTC -0.20% Market capitalization $41.9 million VOL. 24 hours $1.49 billion may end November in the red, contrary to the historical trend, according to which this month was usually the most successful for the cryptocurrency. According to CoinGlass, Bitcoin’s average return in November was about 40.82%, but this time, according to Bitfinex analysts, the asset’s price is trading more than 20% lower than at the beginning of the month. At the time of CoinMarketCap’s data publication, Bitcoin was worth $ 87,305.

In their report, Bitfinex analysts noted that this quarter, historical seasonal patterns did not work. In October, which usually added about 19.9% to the value of the asset, the cryptocurrency lost 3.69%. Nevertheless, some market observers, such as Merlijn The Trader, suggested in early November that weak investor sentiment could create the preconditions for a stronger recovery, calling the situation «the perfect combination of low expectations and seasonal optimism.»

Bitfinex notes that the current decline is only the third time since the beginning of 2024 that the price of Bitcoin has fallen below the lower boundary of the cost model of short-term holders — those who hold coins for less than 155 days. According to CoinGlass, their average realized price is $ 86,787. This shows that part of the market is currently trading near breakeven levels.

Among the reasons for the drop, analysts say that excessive speculative activity in the range of $ 106,000-$ 118,000 has led to some investors «taking losses.» In their opinion, the market can go one of two ways — either experience a «noticeable recovery in demand» or move into a «deeper phase of accumulation» that will last for months.

Despite the weak dynamics, there are signs of growing interest from major players. According to the Santiment platform, the number of wallets containing at least 100 BTC has increased by 0.47% (by 91 wallets) since November 11. Although December is historically considered a quieter month for Bitcoin with an average return of about 4.75% since 2013, analysts do not rule out a possible «revival of demand» in the near future.