CryptoQuant suggested that both scenarios are possible, but the second, which assumes a further decline in the cryptocurrency's price, is less likely.
"The likelihood of a decline of more than 70% from the all-time high, as in previous bearish cycles, is currently low," the experts stated.
They believe the pessimistic scenario will become more likely if there is a new wave of sell-offs and the price consolidates below $80,000. If the asset can consolidate between $90,000 and $96,000, the analysts believe the likelihood of breaking $120,000 early next year will increase significantly.
Selling pressure on digital coins has eased, and a significant portion of small investors and traders have exited the market. This pause in activity has created an equilibrium in which large investors continue to carefully reallocate their positions without triggering sharp price movements, CryptoQuant experts noted.
Amid declining trading volumes, Bitcoin's dynamics are becoming more sensitive to economic news. The coming weeks will be especially important for the formation of a new trend, CryptoQuant representatives concluded.
Earlier, analysts at the on-chain platform Santiment stated that, amid the falling price of the leading cryptocurrency, the activity of large Bitcoin investors, so-called whales, has increased significantly in recent weeks.