Bitcoin rallies have recently struggled to break through the $94,000 mark, even amidst shifts in Fed policy. Despite a 0.25% interest rate cut by the Federal Reserve, Bitcoin’s price remains underwhelming, consolidating around $90,000. The market has rejected significant upward movements beyond $93,000, which limits bullish momentum.
Liquidity Challenges Impacting Bitcoin Rallies
According to analysts, the ongoing liquidity contraction is a critical factor suppressing Bitcoin’s upward trajectory. Bitcoin rallies are being stifled due to reduced liquidity, especially from stablecoins. Stablecoin inflows onto exchanges are a leading indicator of incoming capital, and currently, these signals are showing a downward trend.
Crypto analyst Darkfost highlights that stablecoin inflows have significantly decreased, with ERC-20 inflows dropping from $158 billion in August to about $76 billion this month. This near-50% decline indicates a structural weakening in liquidity, translating directly into weaker buying power.
The Struggle at $94,000
Bitcoin has repeatedly failed to overcome the $94,000 barrier, which is crucial for crossing into higher price territories. Trader DaanCrypto suggests that the $97,000–$98,000 region remains a significant price magnet, but without breaking past $94,000, Bitcoin’s volatility is limited.
The failure to breach $94,000 reinforces vulnerabilities in the current market, leaving it open to sharp reversions that trap both long and short positions.
Structural Weakness and Bearish Patterns
Bitcoin’s inability to surpass the $93,000 level for the third consecutive time signals a concerning trend. The latest rejection formed a clean swing failure pattern after the Federal Open Market Committee meeting, indicating trend exhaustion.
A potential bearish rising wedge could become active if Bitcoin’s price falls below $88,000, possibly leading to a liquidity sweep around $84,000 and further declines toward $80,600.
Despite the current challenges, some analysts, like Captain Fabik, believe that Bitcoin shakeouts are strategic moves to remove weak hands. For a bullish resurgence, Bitcoin needs to secure a weekly close above $90,000, ideally near $93,000. This could provide the structural foundation needed to target the $96,000 breakout zone.
This article does not offer investment advice. All trading involves risk, and readers should conduct their own research before making any financial decisions.
