Bitcoin ($BTC) continues to struggle against its prevailing downward momentum. Any sudden spikes in Bitcoin’s price lack durability, primarily due to a shortage of buying liquidity.
Currently, the on-chain analytics company Glassnode has pinpointed crucial indicators that will influence the upcoming trajectory of $BTC’s price movement.
According to Glassnode’s recent report shared via their X account, Bitcoin has been holding steady within a support zone ranging from $80,700 to $83,400 over the past few weeks. However, market focus is now shifting towards liquidity conditions.
The firm highlights that for Bitcoin to experience a significant trend reversal and enter an upward phase, there must first be a recovery in market liquidity levels.
Glassnode explains that maintaining an upward momentum requires the profit-to-loss ratio to stay above a specific threshold relative to its 90-day moving average.
Historical trends reveal that robust price rebounds—including mid-cycle recoveries observed over the last two years—occurred only when this ratio exceeded 5.
A profit/loss ratio above 5 signals consistent inflows of fresh liquidity into Bitcoin and renewed capital interest in the asset.
At present, however, this metric lingers around 2—well below the critical level needed for sustained growth.
Beyond limited liquidity, Glassnode also points out that Bitcoin’s supply distribution contributes additional downward pressure. Approximately 22% of circulating Bitcoins are currently held at a loss—a figure comparable with correction phases witnessed during early 2022 and mid-2018 periods.
This scenario heightens correction risks and could trigger renewed selling if key support zones fail to hold firm according to analysts’ assessments.
Nevertheless, any selling pressure seems transient and relatively contained. A CryptoQuant analyst notes Binance’s historically low BTC inflows as evidence investors prefer holding rather than offloading their coins at this stage.
The analyst further stresses while short-term pullbacks remain possible they are likely limited in scope. For an enduring bullish trend though, meaningful improvements across liquidity metrics will be essential going forward.
*This content does not constitute financial advice.