Why is Bitcoin price stuck? đ˛
Bitcoin has been consolidating within an $11,200 range for three weeks, struggling to break resistance at $102,750 and holding support at $91,200. This comes after a drop from its Dec. 17 all-time high of $108,364.
Low âsharkâ activity and global liquidity issues
Bitcoinâs stagnant price action is attributed to reduced buying by wallets holding 100â1,000 BTC, known as âsharks.â According to Santiment analyst Brianq, these entities drove Bitcoinâs 91% rally between Oct. 11 and Dec. 17, but their buying activity halted after Dec. 18, 2024.
Additionally, uncertainty around the new U.S. administration and declining global liquidity (tracked by Global M2) have restrained investment in risk assets like Bitcoin. Global M2 has remained flat over the last three weeks, further reducing trading volumes and price movement.
Technical analyst Kevin highlights a battle between bullish divergences and lower liquidity as key to Bitcoinâs current stagnation.
Bitcoin stuck between trendlines
On Jan. 7, Bitcoin dropped below the 50-day simple moving average (SMA) at $97,573 but found support at $92,000, a crucial level since November. Overcoming resistance at the 50-day SMA is essential for a potential breakout.
Data from IntoTheBlock shows Bitcoin is trapped between significant levels. The $92,000â$94,800 demand zone holds 887,960 BTC owned by 1.1 million addresses, while the $94,980â$99,680 supply zone is a major resistance where 2.13 million BTC were bought by 2.36 million addresses.
This tug-of-war between buyers and sellers near these levels highlights the ongoing consolidation, with neither bulls nor bears able to dominate.