Bitcoin surged to around $93,300 last Monday, then attempted to close above a key resistance zone. However, Bitcoin failed to break the mean reversion trend and dipped below $85,000 on Monday.
Key Points:
Bitcoin failed to close above $93,000, failing to confirm a bullish trend reversal.
In the absence of new spot demand, Bitcoin may fluctuate between $80,600 and $96,000 until one of these levels is retested.
Thin spot liquidity and insufficient order book depth are the main reasons Bitcoin struggles to break through $93,000. Despite a dense cost basis area around $84,000, over 400,000 Bitcoins bought in this range have effectively formed an on-chain bottom.
Despite strong historical accumulation, there is a lack of active buying in the $84,000 to $90,000 range. Meanwhile, many short-term holders are still at a loss compared to their average entry price of $104,600, placing the market in a low liquidity zone.
Data from CryptoQuant indicates that Binance's "Bitcoin/Stablecoin Reserve Ratio" has dropped to its lowest level since 2018. This means the standby size of stablecoins is unprecedentedly large and ready to buy Bitcoin. Historically, such extreme stablecoin to Bitcoin ratios on exchanges often precede significant price increases.
Although spot demand remains weak, the surplus of stablecoins indicates that the buying power to drive prices up is ready but currently idle.
Bitcoin is currently trapped between $96,000 (the recent range upper bound) and $80,600–$84,000 (the on-chain cost basis bottom). There are still liquidity dense areas on both sides, meaning a breakout in either direction could trigger significant volatility.
From a bullish perspective, retesting near the $80,600–$84,000 lower bound could be constructive. This would allow BTC to absorb liquidity on the downside and rebuild a foundation before a rebound.
Conversely, if there is an immediate retest of $93,000–$96,000 without first gathering liquidity below, it could backfire, as sellers may re-enter, risking further pullbacks in line with the broader downtrend.
Given the current context, the likelihood of a period of consolidation is increasing ahead of the Federal Open Market Committee (FOMC) meeting scheduled for December 9–10. As the market focuses on signals regarding U.S. interest rate policy, traders may choose to stand by rather than chase volatile movements.
Related: The Japanese government supports a 20% tax rate on cryptocurrency profits, equal to that of stocks
Original: “Bitcoin's Lack of Price Strength Due to Sheepish Spot Buyers: What Happens Next?”
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