Bitcoin's recent price action suggests a persistent struggle to break free from bearish trends, despite intermittent recovery attempts. The cryptocurrency has repeatedly failed to breach key resistance levels, indicating deeper systemic issues at play that are hindering sustained upward momentum.
Dwindling Liquidity and Demand Concerns
A significant factor contributing to Bitcoin's stalled recovery is the noticeable decline in incoming liquidity. Stablecoin inflows to exchanges have reportedly plummeted by 50% since August, signaling a substantial reduction in fresh capital entering the market. This lack of steady demand is a critical bottleneck, preventing the necessary buying pressure that could drive Bitcoin prices higher and overcome current resistance points. Without a resurgence in stablecoin liquidity, the path to a robust recovery remains challenging.
Short-Term Holders Fueling "Sell-the-Bounce" Mentality
Further compounding the market's woes is the behavior of short-term Bitcoin holders (STHs). This cohort appears to be experiencing its deepest loss regime of the year, holding onto unrealized losses. Consequently, any minor price bounce is increasingly viewed as an opportunity to sell and exit positions, rather than a sign of a burgeoning recovery. This "sell-the-bounce" mentality, evident in spikes of profit-taking activity following minor price increases, creates consistent selling pressure. Combined with reduced demand, the inclination of underwater holders to offload their assets on rallies presents a formidable obstacle for bullish momentum.
