Bitcoin’s (BTC) price action has been disappointing this week following yet another unsuccessful attempt to reclaim the monthly volume-weighted average price (VWAP). BTC is consolidating around $90,000 after the Federal Reserve’s 0.25% interest rate cut, with the market continually rejecting significant movement above $93,000, restricting bullish momentum.
Key takeaways:
One Bitcoin analyst highlighted that liquidity contraction is holding back Bitcoin’s upside, decreasing demand in comparison to sell pressure.
Between $94,000 and $98,000 remains a vital liquidity zone, but BTC must avoid creating a bearish break below $88,000.
Liquidity compression dictates Bitcoin’s market behavior
According to crypto analyst Darkfost, Bitcoin’s difficulties are less about sentiment fluctuations and more about diminishing liquidity, especially from stablecoins. The flows of stablecoins onto exchanges provide reliable indications of incoming investments, and currently, that signal is showing red.
The data reveals a notable contraction in liquidity: ERC-20 stablecoin inflows have dropped from $158 billion in August to around $76 billion this month, marking almost a 50% decrease. Even the longer-term average over 90 days has fallen from $130 billion to $118 billion, indicating that this trend is not temporary but structurally weakening.
This drop has directly affected purchasing power. Darkfost pointed out that recent price recoveries are not fueled by robust accumulation but rather by periods of decreased selling pressure, suggesting that the market lacks the necessary capital inflow to sustain higher highs or uphold critical support levels. Until new liquidity emerges, Bitcoin’s price surges are likely to remain limited.
Meanwhile, trader DaanCrypto noted that the overall liquidity map still identifies the $97,000–$98,000 area as the next major price magnet. However, BTC has consistently failed to breach $94,000, the initial hurdle that must be surpassed for increased volatility.
Without that confirmation, the market stays susceptible to abrupt range reversals that continue to entrap both buyers and sellers.
Related: Prediction markets bet Bitcoin won’t reach $100K before year’s end
BTC nears key breakdown threshold near $90,000
From a structural viewpoint, Bitcoin has now failed three consecutive times to surpass the $93,000 mark. The latest rejection established a clear swing failure pattern (SFP) post the FOMC meeting, signaling exhaustion and reinforcing the weakness in trend continuation.
BTC is also approaching confirmation of a bearish rising wedge, which would activate if the price drops below $88,000 and establishes a bearish break of structure (BOS). A breakdown could lead to an external liquidity sweep around $84,000, with deeper downside potential towards the $80,600 quarterly lows, a level aligning with previous inefficiencies on higher-timeframe charts.
Nevertheless, bullish traders like Captain Fabik asserted that BTC is experiencing deliberate shakeouts intended to eliminate weak hands. For a bullish recovery, BTC must secure a weekly close above $90,000 and ideally approach $93,000, providing bulls the structural basis necessary to target the $96,000 breakout zone, where momentum expansion could finally materialize.
Related: Bitcoin due 2026 bottom as exchange volumes grind lower: Analysis
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
