Bitcoin has recaptured the $85,500 threshold following a vigorous ascent, reigniting aspirations for a movement towards the symbolic $90,000 level. Nevertheless, in spite of the recent optimistic momentum, ambiguity continues to heavily impact worldwide financial markets. Anxieties surrounding a rising trade conflict and broader macroeconomic turbulence are keeping investors wary, even while Bitcoin displays signs of resilience.
In the midst of this tumultuous landscape, worries regarding diminishing market liquidity have emerged. Recent press coverage indicated that Bitcoin liquidity is sharply declining due to a slowdown in capital influx. However, blockchain data from CryptoQuant indicates otherwise. The deceleration in Bitcoin’s Realized Capitalization growth — now at +0.6% per month — signifies a decline in fresh capital entering the market, not an actual reduction in liquidity.
Drawing inferences about diminishing liquidity based exclusively on a slowdown in growth can be deceptive. As BTC remains below $90,000, market participants are carefully monitoring price movements and macroeconomic indicators. For now, bullish optimism persists — yet investor prudence shows no signs of diminishing.
Bitcoin Surges Past $86K Amidst Ambiguity
Bitcoin has experienced a subtle yet significant upswing, climbing past the $86,000 threshold as bulls endeavor to initiate a broader recovery rally. After several weeks of lateral motion and downward pressure, this development brings measured optimism to investors. However, the market remains tense. Since the end of January, the cryptocurrency sector has been shaken by global instability, with fears of a trade conflict and erratic policy signals from U.S. President Donald Trump amplifying volatility across various asset classes.
Regardless of this upward motion, selling pressure lingers. Investors are starting to question whether the current cycle has further capacity to extend or if a protracted cooldown is imminent. Certain analysts are now cautioning about a potential 6 to 12-month bear market, citing waning momentum and rising macroeconomic risks.
Compounding the uncertainty, reports have emerged regarding an alleged decrease in Bitcoin market liquidity due to diminished capital inflows. Leading analyst Axel Adler addressed this on X, clarifying that the concern is exaggerated. According to CryptoQuant data, Bitcoin’s Realized Capitalization continues to increase, currently reflecting a 0.6% growth per month and approximating $866 billion.
This increase indicates a slowdown in fresh capital entering the market, rather than a liquidity decline. Drawing conclusions regarding falling liquidity based purely on this metric is misleading. The data hints that the market is cooling down, not collapsing — a nuanced yet significant distinction as Bitcoin seeks to regain higher levels.
BTC Price Evaluating Significant Supply
Bitcoin is presently trading at $88,200 following days of speculation surrounding a possible recovery rally. While the recent upward movement has infused optimism into the market, bulls are still facing a pivotal challenge. To validate a new uptrend and indicate the commencement of a fresh bullish phase, Bitcoin must reclaim and sustain itself above the $90,000 mark — a crucial psychological and technical barrier.
This threshold has served as a formidable barrier in recent weeks, and a decisive breakthrough could attract additional capital inflows and sway sentiment favorably towards buyers. However, the possibility of rejection continues to loom large. Should BTC fail to surpass the $90K mark and convincingly close above both the 200-day moving average (MA) and the 200-day exponential moving average (EMA), downside pressure might swiftly reassert itself.
A failure to sustain momentum at this juncture could incite a retreat below the $84,000 level, where short-term support is likely to be put to the test. Market participants are observing attentively as Bitcoin navigates this vital area, with the coming days expected to determine whether the ongoing rally develops into a complete trend reversal — or falters against resistance. The contention between bulls and bears is far from concluded.
Featured illustration from Dall-E, chart sourced from TradingView
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