Bitcoin (BTC) continues to trade in a consolidation phase, a little above the $60,000 level. The market is approaching 165 days of testing that crucial price zone despite a rally above $80,000 in May that ultimately failed to sustain momentum, according to analyst Darkfost.
The analyst pointed to a lack of fresh liquidity entering the crypto market as one of the main reasons behind Bitcoin’s inability to establish a stronger uptrend.
Stablecoin Drain
Fresh demand has struggled to materialize for both Bitcoin and the broader crypto market, the analysis said. Exchange stablecoin reserves have reflected that trend since the beginning of the year, which essentially shows a near-continuous decline as outflows consistently outpaced inflows.
Over the past 30 days, Binance recorded approximately $1.55 billion in stablecoin outflows – a significant reduction in reserves over a relatively short period. Bybit also saw a further $786 million leave its stablecoin reserves during the same timeframe. In total, the two exchanges recorded nearly $2.3 billion in stablecoin outflows over the past month.
Darkfost explained that the falling reserves indicate that incoming liquidity and investor demand are continuing to contract. The analyst added that market participants appear to be withdrawing stablecoins from exchanges rather than deploying them into crypto assets, while some may be exiting the market entirely.
According to the analysis, such a “pessimistic” market positioning continues to limit the liquidity available to Bitcoin, which then ends up preventing the asset from making a meaningful breakout above its long-running consolidation range around the $60,000 level.
Accumulation Opportunity
Some market analysts, such as Doctor Profit, believe that the ongoing market conditions present a gradual accumulation opportunity. The analyst recently said that investors waiting for Bitcoin’s traditional four-year cycle bottom could end up missing the market’s next move.
Meanwhile, market trader Daan Crypto Trades said the crypto asset is on track to close another weekly candle above its 200-week moving average (200MA), a level often watched as an important long-term support indicator. However, the trader said a stronger move higher is still needed to retrace the previous decline and reclaim the 200-week exponential moving average (200EMA). Until that happens, Bitcoin is expected to remain stuck in its “choppy” trading range around the current level.
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