Bitcoin is entering a phase that looks very different from past boom-and-bust cycles, according to a growing group of analysts who point to shifting liquidity dynamics, macro signals, and changing investor behavior.
Recent commentary from on-chain analysts and macro traders suggests the market is not setting up for a dramatic collapse, but rather for a prolonged period of consolidation as capital flows rotate elsewhere.
Key Takeaways
- Bitcoin appears to be entering a prolonged sideways phase rather than setting up for a deep crash, as capital rotates into stocks and commodities without triggering panic selling.
- On-chain data suggests the old whale-versus-retail cycle has weakened, with long-term institutional holders reducing the risk of sudden, aggressive distribution.
- Despite slower crypto inflows, global liquidity is expanding again, which historically supports Bitcoin with a lag once capital rotates back into risk assets.
One of the clearest signals comes from on-chain data. Ki Young Ju argues that fresh capital inflows into Bitcoin have largely stalled, not because confidence is gone, but because liquidity channels have diversified. In previous cycles, large holders and retail traders moved in predictable waves, often leading to sharp sell-offs. That structure, he says, no longer dominates the market.
Source: Ki Young Ju XLong-term institutional holders now control a significant share of supply, reducing the likelihood of sudden, aggressive distribution. Even large corporate holders are viewed as structurally locked-in rather than opportunistic sellers, weakening the classic “whale dumps on retail” narrative that defined earlier bear markets.
Sideways, not a collapse
Instead of a violent drawdown from all-time highs, analysts increasingly see Bitcoin drifting sideways for months. Capital that might have flowed into BTC has rotated toward equities and commodities, particularly precious metals, without triggering panic selling in crypto. The result is a market that feels stagnant rather than fragile.
This interpretation stands in contrast to bearish expectations of a 50% or deeper crash. The consensus among several observers is that downside risk exists, but it is more likely to play out as time-based consolidation rather than a sharp price reset.
Liquidity is still building in the background
While on-chain inflows have slowed, macro liquidity indicators are sending a different message. Data highlighted by Bitcoin News shows global M2 money supply expanding at its fastest pace since the 2022 bear market bottom. Historically, Bitcoin has reacted to liquidity growth with a lag rather than immediately.
That lagged response is central to the current debate. Expanding money supply does not instantly lift Bitcoin, but it tends to set the foundation for future upside once capital rotates back into risk assets.
Bitcoin as a late-cycle asset
Macro trader Merlijn The Trader frames Bitcoin as a late-cycle asset that reacts to liquidity conditions rather than front-running them. In his view, Bitcoin typically tops when growth peaks and fades when inflation-sensitive assets like copper and gold weaken. When liquidity turns and policy begins to ease, Bitcoin has historically reasserted leadership among risk assets.
With signs that inflation pressure is cooling and monetary policy is gradually softening, this framework implies that Bitcoin may be in a waiting phase rather than at the start of a major downturn.
What the market is signaling now
Taken together, the data paints a picture of a market lacking immediate catalysts but also lacking panic. On-chain metrics point to reduced speculative flow, macro indicators suggest liquidity is rebuilding, and structural ownership changes have dampened extreme volatility.
For traders betting on a sudden crash, analysts caution that the setup looks unfavorable. For longer-term participants, the message is more nuanced: the market may be boring for now, but the underlying conditions that have driven past expansions are quietly forming again.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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Source: https://coindoo.com/market/bitcoin-is-stuck-in-limbo-and-that-might-be-the-bullish-signal/
