Bitcoin: Why are BTC rallies failing?

Lack of Liquidity: Why Is Bitcoin Stalling?

Currently, Bitcoin (BTC) is trading around $87,500, showing a slight decline over the past 24 hours. Despite repeated attempts to reignite momentum, the king of cryptos remains stuck in a zone of uncertainty. According to a recent analysis by Glassnode, relayed by Cointelegraph, these price movements are likely to be short-lived as long as liquidity doesn’t make its grand return to the market.

The major problem identified by analysts is the absence of bid-side liquidity. In simple terms, there aren’t enough buyers to support a sustained rally. Technical breakouts, which usually trigger massive buying waves, end up running out of steam due to lack of follow-through, turning rallies into bull traps.

Glassnode highlights a key indicator to monitor market health: the Realized Profit/Loss Ratio (90-day moving average). Historically, for a genuine bull run to take hold, this ratio must remain above 5. This level signals massive capital inflows and healthy asset rotation into Bitcoin. However, current data suggests we’re still far from this critical threshold, leaving the market vulnerable to sudden corrections.

22% of Supply at a Loss: Will the $80,000 Support Hold?

The other alarming data point concerns holder profitability. Currently, more than 22% of the total Bitcoin supply is held at a loss. This is a high level of financial stress, comparable to the market lows observed in the first quarter of 2022 or during the 2018 bear market. This situation places holders in a fragile psychological position: at the slightest shock, fear could trigger a wave of panic selling.

However, it’s not all doom and gloom. The bulls have so far managed to defend a crucial support zone located between $80,700 and $83,400. As long as this fortress holds, hope for a rebound remains. Moreover, BTC inflows to Binance remain close to their 2020 lows. While this indicates a lack of new capital entering, it also means that immediate selling pressure (people sending their BTC to exchanges to sell) remains contained for now.

Can Bitcoin Reach $93,500 Before Correcting?

Despite this mixed picture, the derivatives market offers a glimmer of hope in the short term, or at least a target. Data from Futures contracts suggests a possible liquidity hunt toward $93,500. This level could act as a magnet for price, attracting Bitcoin to liquidate short positions before deciding on the next major direction.

The scenario is therefore binary. If Bitcoin manages to reclaim this level and the realized profit ratio climbs, the uptrend could resume. Conversely, if the $80,700 support gives way under the weight of supply at a loss, the risk of a more severe correction would become imminent. Traders must therefore watch these levels like a hawk, as volatility could strike without warning.

The current situation demands caution. The market is in a waiting phase, caught between solid support and an absence of bullish catalysts. For investors, the key lies in the return of volumes and improvement in on-chain metrics. Bitcoin has proven its resilience in the past, but without fuel (liquidity), even the most beautiful rocket cannot take off.

Related Articles:

• Worldcoin (WLD) price surges: OpenAI’s challenge to Musk and a potential X rival?
• Hyperliquid (HYPE) surges 60%: Should you buy? Price analysis & DEX growth
• Altseason cancelled: Why investors might be disappointed again