π Bitcoin has been experiencing a pre-halving retrace in recent days, bouncing back after finding support at its first all-time high of $69,000 and hovering around $70,000. Despite this, the leading cryptocurrency faces unprecedented liquidity issues due to rising interest. ππ§
π Experts at CryptoQuant note a significant surge in monthly Bitcoin demand from 40,000 BTC to 213,000 BTC, driven by heightened institutional interest and increased accumulation addresses. However, this surge in demand is not met with a corresponding rise in sell-side liquidity. πΌ
π Two main factors contribute to Bitcoin's liquidity crisis: institutional investments through spot Bitcoin ETFs in the US and increased holdings by large investors known as "whales," alongside a downward trend in sell-side liquidity. This imbalance intensifies the liquidity shortage. ππΈ
π‘ Despite the challenges posed by the liquidity crisis, there's a potential upside for Bitcoin investors. Analysts predict that decreasing sell-side liquidity and high demand levels could lead to price increases. ππ°
πΌ Current Bitcoin market performance shows a slight decrease in price within the last 24 hours, trading volume indicating decreased activity. However, Bitcoin has shown significant growth over the past week and month, with resilience and potential for further growth evident in its year-to-date growth of 152.80%. ππΉ
π Investors should closely monitor market dynamics amidst Bitcoin's liquidity crisis, understanding the reasons behind demand and the effects of decreasing sell-side liquidity. By doing so, they can strategically position themselves to potentially profit from increased prices in the future. π‘π