Bitcoin News Today: Bitcoin's Bounce Can't Reverse Crypto's Liquidity Squeeze

Bitcoin's recent rebound from $80,000 has failed to ignite a broader market recovery, with analysts warning of deepening structural risks as the crypto sector grapples with liquidity strains and macroeconomic headwinds. The asset, which briefly tested $94,000 before retreating, now trades in a tightening channel between $89,188 and $94,212, with key resistance at $96,000 and support near $83,000–$84,000. A breakdown below this support band could expose Bitcoin to a potential slide toward $69,000–$72,000, aligning with Fibonacci retracement levels and 2024 consolidation zones according to analysis.

The broader crypto market has mirrored Bitcoin's struggles, with total market capitalization slipping below $3 trillion - a 30% drop from its October peak of $4.2 trillion according to market data. Over $950 million in liquidations have hit traders in recent days, as open interest contracts evaporate amid thin liquidity and forced selling according to market reports. Bitcoin's dominance index has also fallen below 49%, signaling capital rotation into altcoins like Hedera (HBAR), Hyperliquid (HYPE), and SPX6900, which have extended gains on short-term technical rebounds according to technical analysis. However, analysts caution that such altcoin resilience during Bitcoin weakness often precedes renewed downturns, citing historical patterns from 2019–2022.

Institutional activity highlights growing bifurcation in market sentiment. While spot Bitcoin ETFs recorded $1.38 billion in redemptions over 10 days, on-chain accumulation addresses increased holdings by 42,000 BTC, reflecting divergent strategies between short-term traders and long-term holders. Cathie Wood's Ark Invest added to the narrative by purchasing $32.2 million in CoreWeave shares and $1.08 million in ARK 21Shares Bitcoin ETF (ARKB) during the recent dip, signaling strategic bets on AI infrastructure and crypto exposure. Meanwhile, 21Shares noted that long-term investors have offloaded ~42,000 BTC (~$4 billion) this month, with ETFs posting three consecutive weeks of outflows.

Technical indicators reinforce bearish momentum. Bitcoin's Relative Strength Index (RSI) remains near 38, while the MACD histogram shows persistent selling pressure. A broadening wedge pattern - a bearish continuation signal - has emerged, suggesting heightened volatility. If Bitcoin fails to reclaim the $94,000–$96,000 zone, further declines toward $83,000 could trigger a cascade of stop-loss orders.

Experts predict a potential bottom between $40,700 and $47,500 by late 2026, with some optimism for a 2027 rebound to $150,000 if macro conditions improve. However, immediate risks loom, including the Federal Reserve's delayed rate-cut signals and China's export restrictions, which could exacerbate liquidity strains according to market analysis.

As the market navigates this volatile phase, traders remain on edge. "We are probably close to a local bottom," said Satraj Bambra, CEO of Rails, a hybrid crypto exchange. "But if buyers don't step in decisively, we are likely heading lower. This is still a fragile market" according to market analysis.