Bitcoin struggles to rise above $90,000 as fewer traders and less liquidity cool market action.
- Bitcoin network activity has dropped to its lowest level in a year.
- Liquidity shrinks as fewer funds move through exchanges like Binance and Coinbase.
- Key price levels may determine Bitcoin’s next big move.
Bitcoin Use Slows as Market Cools
Recent data shows that Bitcoin’s network activity is falling. Only about 807,000 BTC addresses were active over a 30-day average. This is the lowest since last year. Fewer people are sending or receiving Bitcoin compared to recent months.
This also means short-term traders and retail users are doing less. That could be a sign that fewer people are excited about trading right now. Binance and Coinbase, two major exchanges, also show fewer users putting in or taking out Bitcoin.
These trends suggest that people are holding onto their Bitcoin instead of trading it. It also hints that long-term holders are not in a rush to sell, which keeps the price from falling fast. But at the same time, fewer people are buying aggressively, which keeps the price from climbing.
Major Exchanges See Drop in Liquidity
In late November, Bitcoin was trading at around $88,500. At that time, Coinbase saw $21 billion in inflows over seven days, while Binance had $15.3 billion. But by late December, even though Bitcoin stayed near the same price, Coinbase inflows dropped to $7.8 billion and Binance to $10.3 billion.
This fall in exchange inflows means there’s less money entering the market. When there’s less liquidity, it becomes harder for prices to change quickly. Traders are being more careful, possibly waiting for stronger signals before jumping back in.
Will Bitcoin Break $90K or Drop First?
Technically, Bitcoin is stuck between $85,000 and $90,000. It has tried several times to climb above $90,000 but has failed to stay there. It’s also trading below the volume-weighted average price (VWAP), which shows market caution.
There are two price zones to watch. On the downside, between $85,800 and $86,500, over $60 million in long positions could be at risk of being closed. On the upside, between $90,600 and $92,000, about $70 million in short positions may be forced to close if the price hikes.
Which zone Bitcoin touches first may shape the market’s next direction.
Source: cointelegraph.com
