Bitcoin prices are consolidating recent gains that saw the cryptocurrency fail to attack recent highs around $125,000.
The outlook for Bitcoin looks increasingly hazy after a massive liquidation of leveraged cryptocurrencies left many traders licking their wounds and likley hesitant to take on as much risk as they did before the great unwind in September.
In addition, risk events aren’t having as much impact on Bitcoin as they did just a few weeks ago, leaving the coin without an obvious catalyst for the next phase of price action.
“Bitcoin stabilized near $113,000 today after two consecutive days of decline, attempting to find footing as short-term traders reassess the balance between fading leverage and improving sentiment in broader risk markets,” explained Samer Hasn, Senior Market Analyst at XS.com.
“This stabilization may offer a glimpse of recovery potential, yet it remains fragile and conditional on the persistence of supportive macro drivers. Fundamentally, the combination of improving broader stock market sentiment, renewed trade optimism between the United States and China, and recovering inflows into Bitcoin exchange-traded funds could help restore market confidence.
“However, the continued weakness in spot bitcoin accumulation and the still-elevated liquidation levels in futures markets suggest that any rebound might remain technical rather than structural.”