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The Bitcoin market is in turmoil, with analysts predicting the price could fall below the symbolic $50,000 threshold. This worrying outlook is explained by the liquidity situation and the evolution of technical signals.
Is a decline in liquidity a sign of a correction?
Renowned analyst Cole Garner recently expressed concern about the current state of the market. According to him, the shrinking liquidity in the Bitcoin network is a worrying sign, foreshadowing the possibility of investor capitulation.
“On-chain liquidity is tight: capitulation is coming” he declared on Platform X (formerly Twitter). Garner relies in particular on the Liquid Vision Index, which measures the overall liquidity provided by central banks. This indicator looks poised to suggest a buying opportunity, but a final dip could occur before a rebound.
Another worrying factor is the dwindling supply of stablecoins, particularly Tether (USDT) and USD Coin (USDC). This decline could limit the purchasing power of the crypto market and put downward pressure on Bitcoin prices.
Contrasting prospects for Bitcoin's future
Despite these short-term bearish signals, Garner remains optimistic about the long term. He pointed out that the overall market structure remains bullish and continues to make new highs recently.
Some market participants still hope the trend will reverse by the end of October, traditionally a favorable month for Bitcoin. External factors, such as potential economic stimulus in China, could drive new capital inflows into cryptocurrencies.
Seasoned trader Peter Brandt goes even further and predicts that Bitcoin will reach $135,000 within a year if certain key support levels hold.
Bitcoin is currently trading around $61,000, and the market is holding its breath. A possible correction below $50,000 could present an interesting buying opportunity for long-term investors ahead of a potential bullish rally. In this uncertain environment, caution and thorough analysis remain essential for investors.
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Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
