Bitcoin's Next Move Depends on Key Support Levels and Liquidity

Bitcoin is currently in a transitional phase, with its next move heavily dependent on how it navigates key support levels. Analysts are closely monitoring several macroeconomic indicators that could influence Bitcoin's trajectory. One significant factor is the broad U.S. money supply, which has recently turned positive after months of contraction. Historical data suggests that major Bitcoin rallies often follow periods when the money supply stops shrinking. With the money supply now roughly 1% above last year's level, there is potential for increased liquidity, which could benefit risk assets like Bitcoin.

Another crucial indicator is bank reserves, which have remained above $3 trillion for most of 2025. High levels of reserves mean that banks can lend freely, keeping credit cheap and plentiful. This environment is favorable for assets that thrive on liquidity, such as Bitcoin. The Federal Reserve's balance sheet is also a critical factor. The Fed has been reducing its balance sheet by selling U.S. Treasuries, but recent announcements indicate a slowing down of this process. This reduction in the pace of Treasury sales could leave more liquidity in the system, potentially benefiting Bitcoin.

International money flows are another key indicator. Currently, large multinational companies can borrow dollars at a discount, which can lead to spare cash leaking into riskier assets like Bitcoin. This setup has previously fueled significant rallies in the cryptocurrency. Should this discount persist, it could provide another tailwind for Bitcoin.

The dominance of long-term holders and scarcity-driven price support marks a shift away from speculative trading toward sustainable accumulation. This trend suggests that Bitcoin is moving towards a more stable and less volatile phase, which could be beneficial for long-term investors. The cryptocurrency market has undergone significant transformations, with Bitcoin maintaining its dominance in liquidity and trading activity. This dominance is further supported by the increasing liquidity in the $111K-$113K region, where key support lies near $92K. Traders are monitoring Bitcoin's reaction at $112K (resistance) and the $105K-$101K zone (support) for potential entries.

Overall, the current transitional phase for Bitcoin is characterized by a neutral stance, with no clear trend emerging. However, the combination of positive macroeconomic indicators and increasing liquidity suggests that Bitcoin could be poised for a new uptrend. Investors are advised to build their positions slowly, using strategies like dollar-cost averaging to mitigate timing risks. This approach allows investors to be prepared for any potential liquidity gushes, ensuring they are already on board when the market conditions become more favorable.

A prominent analyst in the cryptocurrency market has recently shared insights on Bitcoin’s current state and potential price movements amidst its volatile trajectory. Known in the market as Rekt Capital, the analyst and trader suggests that Bitcoin could be in a significant transitional phase. This period may involve a correction, followed by the onset of a new upward movement. Rekt Capital highlights the possibility of minor downward deviations for Bitcoin in the short term. However, regaining a critical support level post-decline is deemed crucial. According to the analyst, reclaiming the support level around $104,400 could be pivotal for determining Bitcoin’s price trajectory. The analyst also notes that this level has been maintained for nearly six to seven weeks.

Should Bitcoin reclaim this support level, the next anticipated step is converting the resistance around $109,000 into support. This milestone is expected to play a crucial role in driving the price upward. Overcoming and confirming the current resistance level around $109,000 as support may enable a new upward trend for Bitcoin. Rekt Capital opines that such a scenario could lead to a multi-week upward movement. The key aspect here is the clear confirmation of the price breakout. Rekt Capital: “Reclaiming the level around $109,000 as support and achieving this successfully can transition to a new upward movement. Once the breakout is confirmed, an upward movement for a few weeks can be expected. It’s really important for the price to confirm this breakout eventually. If successful, we’ll have some time for a rise toward new record levels.”

The analysis indicates that Bitcoin is still trading around $106,710. The analyst advises investors to monitor price movements through the lens of support levels and potential resistance breakouts. Rekt Capital warns that the transition period requires cautious evaluation by investors. The analysis also underscores the possibility of unforeseen risks in market movements during this time. As the analyst emphasizes, closely following the markets and evaluating analyses from multiple angles are crucial before any investment decision. Support and resistance levels influencing Bitcoin’s price movements can play a decisive role in investors’ decision-making processes. The current scenario, according to the analyst, requires Bitcoin to maintain and surpass critical levels to initiate an upward movement. The performance of these levels can shape Bitcoin’s trend in the coming weeks. Bitcoin’s future price fluctuations may be closely tied to the persistence of support and resistance zones. Analysts suggest that investors should closely monitor these technical levels and always be prepared for sudden market changes. Expert opinions in the field can be guiding for the short- and medium-term market perspectives.