Bitcoin's (BTC) price action has remained underwhelming this week, marked by another failed attempt to reclaim the monthly volume-weighted average price (VWAP). Following the Federal Reserve's 0.25% interest rate cut, BTC has been consolidating near $90,000. The market has continued to reject any meaningful push above $93,000, thereby limiting bullish momentum.
Key takeaways from the current market behavior include:
- •One Bitcoin analyst has indicated that liquidity contraction is suppressing Bitcoin's upside, reducing demand relative to sell pressure.
- •The critical liquidity pocket remains between $94,000 and $98,000. However, BTC must avoid forming a bearish break of structure below $88,000.
Liquidity Compression Dictates Bitcoin’s Market Behavior
According to crypto analyst Darkfost, Bitcoin's struggle is less about sentiment swings and more about declining liquidity, particularly from stablecoins. Stablecoin inflows onto exchanges serve as a reliable signal of incoming capital, and this signal is currently weak.
Data reveals a significant liquidity contraction: ERC-20 stablecoin inflows have decreased from $158 billion in August to approximately $76 billion this month, representing a nearly 50% drop. Even the longer-term 90-day average has declined from $130 billion to $118 billion, confirming that this trend is not temporary but structurally deteriorating.
This decline directly translates into weaker buying power. Darkfost noted that recent rebounds are not driven by strong accumulation but by periods of reduced sell pressure, indicating a lack of sufficient inflows to sustain higher highs or defend key support levels. Until fresh liquidity returns, Bitcoin's rallies are likely to remain shallow.
Trader DaanCrypto added that the broader liquidity map still indicates the $97,000–$98,000 region as the next significant magnet for price. However, BTC has repeatedly failed to break $94,000, which is the first barrier that must be overcome for volatility expansion.
Without this confirmation, the market remains vulnerable to sharp range reversions that continue to trap both long and short positions.
BTC Nears Key Breakdown Threshold Near $90,000
From a structural standpoint, Bitcoin has now experienced three consecutive failed attempts to break the $93,000 level. The latest rejection formed a clean swing failure pattern (SFP) after the FOMC meeting, signaling exhaustion and reinforcing the weakness in trend continuation.
BTC is also nearing confirmation of a bearish rising wedge, which becomes active if the price falls below $88,000 and forms a bearish break of structure (BOS). A breakdown would expose an external liquidity sweep around $84,000, with potential for deeper downside toward the $80,600 quarterly lows, a level that aligns with prior inefficiencies on higher-timeframe charts.
Despite these bearish signals, bullish traders like Captain Fabik maintain that BTC is undergoing deliberate shakeouts designed to remove weak hands. For a bullish reclaim, BTC must secure a weekly close above $90,000 and ideally near $93,000. This would provide bulls with the structural foundation required to attack the $96,000 breakout zone, where a momentum expansion could finally unfold.
