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Crypto analytics platform Swissblock says two factors could combine to trigger a massive rally for Bitcoin (BTC).
According to Swissblock, an increase in liquidity and the number of Bitcoin users are the ingredients necessary for the formation of a “historically bullish setup.”
“Liquidity remains strong. Unlike true bear markets, liquidity is not collapsing.
Network Growth dipped slightly while liquidity held up (2).
The last time this setup occurred? October 2024 (1), right before the big rally into November.”
Source: Swissblock
According to Swissblock, Bitcoin is in the “process of finding a bottom,” a phenomenon which has historically been marked by the Aggregated Impulse Signal falling to zero.
The Aggregated Impulse Signal, an indicator calibrated from 0 to 100 that gauges market momentum and selling pressure, is used to identify potential bottoms.
“Markets move in cycles of stress and recovery.
When stress peaks, short-term traders are forced to sell at a loss.
Capitulation stress often mark the end of downside phases, setting the stage for recovery…
…At that exact point, the Impulse Signal collapses to zero.
That’s the moment panic exhausts and new buyers step in.
Since early 2024, this reset has only happened 3 times.
Each one marked a cycle bottom.
Each one was followed by a sustained recovery.
We are approaching that setup again.”
Swissblock further says that Bitcoin experienced the “sharpest wave of panic selling” this cycle from late August to early September.
“That flush cleared excess leverage and reset the market back to cost basis.
This is how bottoms are built.”
Source: Swissblock
Bitcoin is trading at $116,592 at time of writing.
