Bitfinex Identifies “Seller Exhaustion” as Bitcoin Targets Potential Recovery Rally

Bitcoin experienced a significant recovery this week, surging nearly 8% in a single day as analysts indicated potential signs of a local bottom being established.

Key Takeaways:

• Bitcoin surged nearly 8% as analysts highlighted indications that a local bottom may be emerging.
• Bitfinex noted “seller exhaustion” following a $19 billion leverage flush that mitigated market risk.
• Views are divided on the cycle, with some suggesting this rally no longer adheres to previous four-year trends.

In a statement issued on Tuesday, Bitfinex remarked that the market is exhibiting “seller exhaustion” after a phase of significant deleveraging and panic-induced exits by short-term holders.

“The interplay of extreme deleveraging, capitulation among short-term holders, and initial signs of seller exhaustion has fostered conditions conducive to a stabilization phase and a relief bounce,” the firm stated.

Bitcoin Approaches $94K Following $19B Leverage Flush, Bitfinex Reports

This commentary preceded a rally on Wednesday that briefly propelled Bitcoin toward $94,000. At the time of writing, the asset was trading around $91,440, as per CoinMarketCap.

Bitfinex also contended that the market is now functioning on a “leaner leverage base,” which diminishes the risk of widespread liquidations.

This transition follows a sharp correction in October, during which approximately $19 billion was removed from what traders had broadly characterized as an overleveraged environment.

The downturn initiated a wider decline that saw Bitcoin drop to lows near $82,000 in late November.

With excess risk eliminated, the exchange noted that the remaining leverage appears more contained, alleviating pressure on prices and enhancing the likelihood of a more stable consolidation phase.

The late-year rebound is also fueling discussions regarding the relevance of Bitcoin’s established four-year cycle.

According to older models, the cycle’s peak may have already occurred in October, when prices reached record highs close to $125,100.

Nevertheless, the recent recovery has complicated this narrative, with some market observers suggesting that the structure of this cycle appears distinct from its predecessors.

Seasonal trends provide little clarity. Historically, December has been one of Bitcoin’s quieter months, yielding an average gain of 4.69% since 2013, according to data from CoinGlass.

This year, however, has already deviated from tradition. November, typically the strongest month, concluded with a significant loss exceeding 17%.

Several analysts maintain a positive outlook. Market commentator PlanC stated on X that “this Bitcoin cycle is NOT like past cycles,” while trader Quinten Francois remarked that the asset is now “closer to the bottom than to the top.”

This Bitcoin cycle is NOT like past cycles. I have been warning you all and explaining this for well over a year now. Hopefully, you were paying attention.

— PlanC (@TheRealPlanC) December 4, 2025

Cathie Wood Predicts Liquidity Rebound for Crypto

As previously reported, ARK Invest CEO Cathie Wood has predicted that the liquidity crunch affecting crypto and AI markets will reverse within weeks, driven by three anticipated Federal Reserve policy changes before the year concludes.

Her firm continues to actively purchase crypto equities during the downturn, investing over $93 million in a single day this week across undervalued digital asset stocks.

During ARK’s November market webinar, she identified three temporary liquidity constraints she expects to dissipate quickly due to Federal Reserve actions and renewed government spending.

Wood anticipates that the Federal Reserve will conclude quantitative tightening at its December 10 meeting, thereby alleviating one pressure point.

The government shutdown that led to the Treasury General Account cash accumulation has ended, allowing funds to re-enter circulation.

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