Here’s the bottom of Bitcoin’s current trading range, according to Bitfinex.

Bitcoin (BTC) has established a local low at $56,000 for the current trade following a 17.5% drop from its all-time high of $73,700.

According to Bitfinex analysts in the latest Bitfinex Alpha report, the main reason behind BTC's lower position is the stabilization of Bitcoin exchange-traded funds (ETFs) entering the space. This suggests that demand for the property is beginning to slow down, allowing the market to rebalance.

Bitcoin establishes a local bottom

Historical Bitcoin market cycle patterns show that the area's highest decline has never been greater than 23%. This was seen at the bottom of the bear market in November 2022, when BTC fell below $15,500. The average correction over this cycle, including intraday flash crashes, mostly fueled by leverage, has hovered in the 20% to 22% range.

Bitcoin's last correction was set at 17.5%, analysts believe that the current cycle is following the steps of the previous ones.

Bitfinex's claim is confirmed by the price received by short-term BTC holders, which hovers around $55,800, serving as a key support and resistance level in this cycle. A drop to $56,000 puts BTC in line with analysts' expected highs, which is 23-24% as seen historically. The $56,000 level could be critical to Bitcoin's short-term market direction.

“Regardless of these levels, it's worth noting that BTC has already corrected 17.5%, which is close to the average decline from the local highs since the bear market lows. Regardless of whether we see BTC moving lower, it's likely to be V-shaped as seen for previous dips since 2023. Analysts explained that we do not expect a recovery.

Bitcoin ETFs see negative flows

Last week, Bitcoin ETFs experienced their first net negative inflow since their launch in early January. Each trading day witnessed net negative inflows, with total withdrawals from grayscale GBTC exceeding $2 billion. However, after deducting the discount from nine new products, the net flow for the week was 896 million dollars.

Demand for ETFs has waned as inflows from record highs of more than $1 billion per day have been seen.

Meanwhile, Bitfinex expects a near-term future for BTC due to reduced demand for ETFs. The decline is expected to be relatively modest, with data from Monday showing that flows have turned positive.