Why is Bitcoin Stuck Below $90k?

Bitcoin is trading at $88k after several failed attempts at $90k. This marks a shift from its usual sharp declines following previous failures to surpass that level.

The 1-day chart shows price hikes bringing Bitcoin close to $90,000, but each attempt is followed by a sharp pullback.

On Monday, it surged to a high of $90,015 but retraced shortly after, slipping to a low of $85,140. A similar event occurred on Wednesday, when the asset peaked at $90,300 before retracing. BTC sank lower the next day, dropping to $84k. In all of the highlighted events, the uptick ended after breaking $90k.

However, Friday wss an exception. Bitcoin had its best performance during the session, gaining over 3%. The trend of a notable correction seen in previous days did not unfold. It is worth noting that the apex coin did not break above $90k. It experienced slight rejections shortly after breaking $89k and held on to the $88k support.

Nonetheless, amid the 3% surge, BTC remains below $90k. The 1-week timeframe also shows that the apex coin is yet to register any significant price change over the last five days.

Why is it Stuck?

A sweep through X reveals the normal shock to these events. While its a consensus that BTC will retrace to price the Japan rate hike, many are surprised at the sudden hikes and decline afterward.

One analysis explained the reason for the latest price swings. It noted that the Inter-Exchange Flow Pulse (IFP), which measures how much Bitcoin moves between trading platforms and is used to gauge the flow of money in the market, has turned red, signaling a deterioration in Bitcoin’s internal market liquidity. This metric tracks BTC movements between exchanges and serves as a proxy for capital circulation in the market.

When IFP is high, essential mechanisms such as arbitrage and liquidity provision function efficiently, keeping order books deep and price action stable. Conversely, a low IFP reflects weakened market flow, where these mechanisms struggle, making prices increasingly vulnerable to relatively small trades.

The sudden price swing seen since Monday suggests that IFP is still negative

Aside from the negative IFP, the liquidation heatmap from Coinglass points to growing bearish conviction. In recent times, traders placed short positions when BTC was much lower, as they were convinced of further decline. As a result of the new positions, a liquidation cluster has formed around $90,500.

Most of the new orders happened this week, causing the cluster. If Bitcoin breaks above $90.5k, $156 million will be rekt. The bears have since staged massive selloffs at $90k to prevent such liquidation.

The actions halt any advances at the highlighted mark remains high. As of the time of writing, there are large sell orders at $89,900 on the futures and spot order books. The job of keeping prices below the liquidation cluster becomes easier, given the negative IFP that makes BTC susceptible to small trading actions.

Bitcoin Flips Bullish

Bitcoin flipped bullish on the 1-day chart amid recent price action.  It has remained rangebound for most of the last five days, with no major breakouts. However, the moving average convergence divergence has reversed its bearish crossover and is currently printing buy signals.

A closer look at the chart indicates no strong divergence on MACD, suggesting that the positive crossover remains frigile and could flip at the slightest price swing 

The post Why is Bitcoin Stuck Below $90k? appeared first on CoinTab News.