Why is Bitcoin price stuck?
Let’s look closer at the reasons why the BTC price remains stuck today.
Low “shark” activity and liquidity
Brianq notes that “enormous accumulation” by these entities was responsible for Bitcoin’s 91% rally between Oct. 11 and Dec. 17, when it reached its current record highs.
“Since Dec. 18, 2024, this group’s buying has come to a halt.”
In addition, uncertainties surrounding the new US administration and the anticipation of significant data releases have led to reduced global liquidity.
The chart below shows Global Liquidity (Global M2), an indicator that tracks growth in global money supply from major central banks against Bitcoin price, which has been dropping since October 2023. Global M2 has been stuck within a narrow range over the last three weeks.
Reducing Global M2 means less money entering the global system, discouraging spending on perceived “risk assets” such as Bitcoin. This could reduce trading volumes, keeping Bitcoin’s price movements minimal.
Bitcoin stuck between two trendlines
This move, however, saw BTC/USD find support at $92,000, a key support level since Nov. 20.
Bitcoin’s price is fighting the resistance from the 50 SMA, which it needs to overcome to increase the chances of breaking out of the current consolidation pattern.
Additional data from IntoTheBlock shows the ongoing stalemate between buyers and sellers. Its in/out of the money around price (IOMAP) model reveals that the price is stuck between two significant levels.
Namely, these are the $92,000 to $94,800 demand zones, where approximately 887,960 BTC were previously bought by 1.1 million addresses.
Bitcoin IOMAP chart. Source: IntoTheBlock
On the upside, the supplier congestion zone between $94,980 and $99,680 poses a stiff barrier for the bulls. This is where approximately 2.13 million BTC were previously bought by roughly 2.36 million addresses.
Note that these price levels are just below or above the spot price, demonstrating the current tug-of-war between the bears and the bulls.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
