Bitcoin Price Enters 'Controlled Volatility' Phase

Bitcoin Price Enters 'Controlled Volatility' Phase – What This Means for $90K

The cryptocurrency market continues to experience a cycle of volatility, and Bitcoin [BTC] remains at the center of this dynamic. Recently, Bitcoin's price movements have been tumultuous, prompting speculations regarding another flash crash due to a lack of visible market stability. Just recently, the price of BTC dropped from $89,000 to $87,000, only to bounce back to $91,000, all within a short four-hour timeframe.

Key Takeaways

Bitcoin is currently in a volatile state, experiencing rapid price changes.
Recent market activity has shown net losses, with more holders selling at a loss.
The lack of significant ETF inflows reflects a cautious market sentiment.
Whales may be influencing the price movements intentionally, potentially trapping investors.
Bitcoin's price has yet to recover to six figures following the October downturn.

Bitcoin price

Given the current conditions, the thin liquidity on the buy side for BTC makes sense. Notably, Bitcoin is still trading approximately 30% below its all-time high (ATH).

Bitcoin’s price action demonstrates significant fluctuations and uncertainty, with events indicating potential capitulation among holders. The manipulative nature of whale trading and losses from leveraged positions suggest that the market remains under pressure, with the $90,000 price point appearing increasingly vulnerable.

Net Losses Return

Bitcoin price

Market reactions give insight into the current situation. Bitcoin's Net Realized Profit/Loss has turned negative again, suggesting that exchange netflows are being driven primarily by HODLers who are selling at a loss rather than at a profit. This indicates that capitulation pressure is beginning to creep back into the market. Despite a slight uptick in the Coinbase Premium Index for BTC, ETF flows remain subdued, indicating a cautious and risk-averse market. Ultimately, Bitcoin's volatility continues to pose risks to its $90,000 price level.

Bitcoin Price Loop Raises Questions About Whale Moves

It has been nearly two months since the crash in October unsettled the market, and Bitcoin has not yet surpassed the $100,000 mark. On its daily chart, Bitcoin has shown three successive lower highs, with short-term price rebounds at $80,000, $83,000, and $88,000 since mid-November.

During this turbulent period, leveraged positions have taken significant hits. Reports indicate that $171 million in long positions and $71 million in short positions were liquidated within a single four-hour period, raising suspicions of possible market manipulation.

BTC

Source: Coinglass

The data reveals that nearly $500 million has been liquidated over the past 24 hours. Moreover, Bitcoin's recent erratic price behavior, as noted earlier by AMBCrypto, raises concerns about whether influential traders are purposely keeping BTC's price in a loop to facilitate a market deleveraging. Analyzing Bitcoin's Open Interest (OI), which has dropped by $30 billion from its October peak of $94 billion, reinforces this theory. It appears that whale activity may be intentionally keeping the current Bitcoin price trend in a controlled bear trap.

Final Thoughts

The current landscape for Bitcoin highlights a complex interplay between volatility, market participant behavior, and potential market manipulation. As traders navigate these turbulent waters, the looming $90,000 level remains critical as both a psychological barrier and a potential tipping point for Bitcoin's future pricing.