Bitcoin regains $102,000 as sell-side liquidity dries up

Based on CryptoSlate data, Bitcoin (BTC) regained the $102,000 price level on January 6th after rising 4% on the day amid a broader market rally as accumulation continued to outpace profit-taking. Ta.

The flagship cryptocurrency was trading at $101,630 at press time after failing to maintain its upward momentum as US markets closed for the day. Recovery comes as sell-side liquidity continues to shrink, according to latest Bitfinex Alpha report.

Bitcoin’s return to the $102,000 level follows a significant 15% correction from the all-time high (ATH) of $108,100 reached on December 17, 2024. The correction followed a 61% rally triggered by the November 6 US election results. , 2024, suggesting solid market optimism.

Analysts had expected a sharp pullback in the first quarter, but new indicators suggest bearish pressure may have largely subsided, the report said.

Sell-side liquidity at record lows

The main driver of Bitcoin price fluctuations is the rapid decline in sell-side liquidity. The liquidity ratio, a measure of how long current supply can meet market demand, fell sharply to 6.6 months from 41 months in October.

This sharp decline reflects the liquidity crunch seen during Bitcoin's rise in the first and fourth quarters of last year, indicating limited supply during periods of high demand. There is.

Additionally, miners, an important source of seller-side pressure, are also contributing to the current liquidity dynamics, as spot sales have declined after the 2024 halving.

Historically, miners sold Bitcoin to fund operations and machine upgrades, but the flow from miners to exchanges has slowed significantly since April 2024. Although miner inflows increased last November, these levels are still far below previous peaks.

According to Bitfinex, miners are currently in a strong position, supported by large amounts of unrealized profits. This holding behavior further tightened liquidity and strengthened Bitcoin's upward trajectory.

This data suggests a broader trend of miners holding onto their BTC, either in anticipation of price increases or in an attempt to optimize their positions amid favorable market conditions.

strong start

The report highlighted that Bitcoin is starting 2025 on a solid footing with positive on-chain indicators. He further added that the interaction with reduced sell-side liquidity will continue to be a crucial factor in Bitcoin price movements.

Although the risk of a significant pullback remains, liquidity metrics at multi-year lows and miners' confidence expressed through their holding patterns suggest that much of the downward pressure has eased and further upside is possible. This suggests that preparations are being made.

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