Bitcoin maintains at $114,000, but one crucial indicator demands caution!
In the current base-building phase for Bitcoin, there is a notable ask-side pressure and muted volume, indicating weak accumulation. This comes after a five-week rally that ended at $109K, marking the first base for Bitcoin.
The first base was established around $77K, which catalyzed the rally. Since then, Bitcoin has shown a mixed picture of buy-side interest and on-chain accumulation signals. While some accumulation wallets show latent demand, these holdings have been relatively inactive and poorly timed against the recent market weakness, limiting their support for price stability or rebound.
The liquidity inventory ratio, which measures how much liquid supply is available, has collapsed to very low levels, reducing market resilience and suggesting cautious or slow accumulation activity currently.
From the order book and technical perspective, the $112,000 to $113,000 range acts as a critical short-term support zone. Signs of stop-loss orders are emerging around $112,000 that could temporarily halt declines or enable a bottoming process. Bitcoin’s 14-day RSI is in the neutral to mildly bullish range, indicating neither overbought nor oversold conditions.
However, the market is at a sensitive juncture with volatile liquidation clusters near $113K, suggesting that strong buy-side interest is limited but could emerge if the price maintains support and accumulation resumes more actively.
The $113.2K-$113.4K zone is a critical liquidation and support level, where significant forced liquidations on long positions can cause sharp price moves downwards. Data indicates that a drop below $113,000 could trigger approximately $570 million in long liquidations, suggesting strong liquidation clusters in this zone.
If past structure repeats, Bitcoin could be building its third base in the $110K-$119K range. This would follow the pattern set by the first base around $77K and the second base formed in the $105k-$109k demand zone, which fueled the breakout to the $123K all-time high. However, unless stronger bids start coming in, any push higher by Bitcoin remains at risk of getting faded.
In summary, Bitcoin is at a critical point, with potential for continued short-term price pressure unless buy-side liquidation demand strengthens significantly to offset the liquidation-driven selling. The market is showing signs of cautious optimism about possible stabilization or stepwise recovery if the $112K-$113K zone holds.
- The current base-building phase for Bitcoin might also affect other cryptocurrencies like XRP, as the market conditions could impact the entire crypto finance sector.
- The five-week rally for Bitcoin, which ended at $109K, has indirectly impacted the value of BTC relative to other cryptocurrencies such as ethereum, potentially altering the balance of power within the crypto market.
- As the liquidation inventory ratio is low, it may have repercussions on cryptocurrencies like bitcoin and other crypto assets with significant market capitalization, as a drop below $113,000 could trigger numerous liquidations, causing market disruption.
- The development and growth of decentralized finance (DeFi) platforms could benefit from a stable or recovering bitcoin market. Accumulation or increased buying activity in Bitcoin might draw in more investors to explore DeFi projects, thereby driving innovation and technology adoption in the finance sector.
