Bitcoin’s (BTC) price movement has been lackluster this week after another unsuccessful attempt to regain the monthly volume-weighted average price (VWAP), with BTC stabilizing around $90,000 following the Federal Reserve’s 0.25% interest rate cut. The market continued to reject any substantial movement above $93,000, thus restricting bullish momentum.
Key takeaways:
An analyst noted that the contraction of liquidity is limiting Bitcoin’s upside, diminishing demand relative to selling pressure.
The essential liquidity range remains between $94,000 and $98,000, but BTC must steer clear of forming a bearish break of structure below $88,000.
Liquidity compression dictates Bitcoin’s market behavior
According to crypto analyst Darkfost, Bitcoin’s difficulties are more a result of declining liquidity, particularly from stablecoins, than sentiment shifts. Inflows of stablecoins onto exchanges are a reliable indicator of incoming capital, and currently, that indicator is showing distress.
The data displayed a considerable contraction in liquidity: inflows of ERC-20 stablecoins fell from $158 billion in August to about $76 billion this month, marking a nearly 50% decrease. Even the 90-day moving average has dropped from $130 billion to $118 billion, indicating that this trend is not only temporary, but a structural decline.
This drop has directly impacted buying power. Darkfost pointed out that recent recoveries are not fueled by strong accumulation, but rather by times of reduced selling pressure, suggesting the market lacks the necessary inflows to maintain higher peaks or protect crucial support levels. Unless new liquidity arrives, Bitcoin’s rallies are likely to stay shallow.
In the meantime, trader Daan Crypto Trades wrote that the broader liquidity map still points to the $97,000–$98,000 area as the next major target for price. However, BTC has repeatedly struggled to surpass $94,000, which is the first hurdle that needs to be cleared for increased volatility.
Without confirmation of this break, the market remains susceptible to sharp reversals that continue to ensnare both bullish and bearish positions.
Related: Prediction markets bet Bitcoin won’t reach $100K before year’s end
BTC nears key breakdown threshold near $90,000
From a structural perspective, Bitcoin has now failed three consecutive attempts to break through the $93,000 level. The latest rejection created a clear swing failure pattern (SFP) following the FOMC meeting, indicating exhaustion and substantiating the weakness in trend continuity.
BTC is also approaching confirmation of a bearish rising wedge, which would become valid if the price dips below $88,000 and establishes a bearish break of structure (BOS). A breakdown could reveal a liquidity sweep around $84,000, with deeper downside potential toward the $80,600 quarterly lows, which align with previous deficiencies on higher-timeframe charts.
However, optimistic traders like Captain Faibik argued that BTC is experiencing intentional shakeouts intended to eliminate weak hands. For a bullish recovery, BTC must achieve a weekly close above $90,000 and ideally near $93,000, providing the bulls with the structural support necessary to target the $96,000 breakout zone, where a momentum surge may finally unfold.
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.
