Analysts See Bitcoin Poised for Sharp Rebound as Liquidity Improves
Swissblock, a leading crypto analytics firm, is hinting that Bitcoin could be approaching a significant market bottom.
According to their insights, a unique indicator known as the Bitcoin Fundamental Index (BFI) suggests that the cryptocurrency might be preparing for a major move.
BFI, a metric that merges liquidity and network growth data, has been showing signs of improvement. Swissblock interprets this as a signal that more investors are entering the Bitcoin market, adding fresh liquidity. They believe this influx is part of a crucial bottoming process that could soon give way to a substantial price surge.
The firm points out that Bitcoin’s liquidity needs to cross a critical threshold of 50 for a clear bullish reversal to take shape. As of now, the liquidity level is around 44. If it manages to push past this point, Swissblock predicts a rapid upward move that might catch bearish traders off guard.
Adding to their positive outlook, Swissblock highlights the recent increase in the M2 money supply, which reflects the total money circulating in the economy. Bitcoin, they say, has been slow to respond to this growth but is now beginning to align with it, which could bolster its upward momentum.
Despite their bullish stance, Swissblock remains cautious, acknowledging that a short-term dip could still occur. They see this as an opportunity for new investors to buy in at lower prices, potentially increasing market liquidity. While the possibility of a brief pullback exists, the firm ultimately expects a significant upward breakout once current conditions stabilize.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
