Has the downturn period in Bitcoin ended?

Bitcoin is attracting investor interest again with assessments suggesting that the recent waves of selling may largely be complete. According to reports supported by the World Bank, the likelihood of Bitcoin experiencing a new rally by the end of the year is strengthening. Geoffrey Kendrick, the digital asset research director at Standard Chartered, notes that the recent downward movement coincides with historically similar-sized pullbacks, indicating a potential bottom formation in the market.

Kendrick emphasizes that the sharp correction in Bitcoin's price aligns with the third significant 30% pullback in this cycle, following historical patterns. He also points out that some key indicators have retreated to excessive levels; one of these is MicroStrategy's mNAV value. He states that the ratio of the company's market value to the current value of its Bitcoin assets returning to the 1.0 level signals 'absolute bottom' levels in the markets. Kendrick notes that this reading provides a strong signal that the selling pressure has ended.

In this process, Bitcoin dropped to $89,420 in the early hours of today, marking its lowest level since February. Nansen analyst Nicolai Sondergaard indicates that market liquidity has decreased by approximately 30% since the liquidation shock in October, stating that weak market depth could lead to significant price fluctuations even with small sell-offs. Sondergaard adds that options data suggests a slight dip toward the $80,000 level, but asserts that the current price levels or a minor recovery are more likely.

Year-end targets are once again coming back to investors' attention. Kendrick, who previously forecasted that Bitcoin could reach $200,000 by the year-end, prefers not to revise this target. In his long-term predictions, he maintains his forecast that Bitcoin could reach $500,000 by 2028. The reduction in sell pressure in the markets, key indicators like mNAV retreating to excessive levels, and the slowing of short-term investor losses could open the door to a new rise as the year comes to a close.