Bitcoin continues to face challenges below the $90,000 mark, struggling to regain higher levels while bulls concentrate on maintaining current demand zones. Following a pronounced correction from recent peaks, the price action has entered a consolidation phase that seems relatively stable at first glance. Volatility has reduced, and short-term price changes imply a pause in the market instead of a definitive breakdown. However, this perceived calmness could be deceiving.
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As reported by XWIN Research Japan via CryptoQuant, on-chain data indicates increasing structural risk lurking beneath the surface. The Inter-Exchange Flow Pulse (IFP), a metric measuring Bitcoin’s movement among exchanges and acting as a barometer for internal market liquidity, has turned negative.
In such environments, price movements are often sharper and less orderly once a direction is set. While lower exchange balances can reduce immediate selling pressure, they also heighten the effects of sudden demand or forced liquidations.
This shift points to a significant slowdown in capital flow across trading platforms, indicating that liquidity conditions are worsening.
Inter-Exchange Flow Pulse Signals Structural Fragility
The report elaborates that the Inter-Exchange Flow Pulse (IFP) evaluates how actively Bitcoin is transferred from one exchange to another, serving as an indicator for internal market liquidity and capital movement. When IFP is high, capital flows smoothly across venues, arbitrage opportunities are promptly addressed, and liquidity providers maintain robust order books.
Under these circumstances, price discovery is smoother, and volatility remains restrained. Conversely, when IFP declines, the market’s internal “blood flow” deteriorates. Capital becomes stagnant, liquidity becomes fragmented, and prices become more sensitive to relatively minor trades.
This decline in liquidity is coinciding with historically low balances on exchanges. Although a reduced supply for sale can serve as initial price support, it also results in thinner order books. Once the price starts moving decisively in either direction, slippage increases and volatility rises.
With leverage still high among derivatives markets, instability is less influenced by directional belief and more by the intensity of forced reactions.
Historically, episodes when IFP turned negative produced sudden corrections and sharp price fluctuations, rather than smooth trends. The main risk at present is not aggressive distribution but rather structural fragility. Until inter-exchange liquidity improves, Bitcoin remains susceptible to sudden, pronounced moves, rendering leveraged positions particularly risky in the current market framework.
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Bitcoin Price Consolidates Below Key Moving Averages
The 4-hour Bitcoin chart showcases a market in consolidation after a steep corrective move. After the aggressive sell-off in late November, BTC found a local minimum around the $82,000–$83,000 area, where strong demand emerged and sparked a rebound. However, that recovery quickly lost momentum, and the price is presently fluctuating below the descending cluster of moving averages.
Currently, Bitcoin is priced around the $89,000–$90,000 range, consistently failing to regain the 200-period moving average on the 4-hour chart. The 50 and 100-period moving averages are also trending downward, providing dynamic resistance and reinforcing the short-term bearish outlook. Every attempt to advance has encountered selling pressure, indicating that bulls lack confidence at these levels.
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Volume has significantly decreased during this consolidation phase, reflecting lower participation and indecision among traders. This typically foreshadows a volatility increase, especially when the price compresses beneath significant resistance. Structurally, BTC remains at risk as long as it trades below the $92,000–$94,000 level, which previously served as support and now restricts upward movements.
On the downside, the $87,000–$88,000 range is becoming immediate support. A decisive drop below this level could reopen pathways toward the $84,000 area. Until a clear breakout occurs, Bitcoin remains precariously balanced between distribution and base-building.
Featured image from ChatGPT, chart from TradingView.com
