Why is the price of Bitcoin stuck?

Bitcoin (BTC) prices were consolidating around $11,200 as bulls failed to sustain a rally above $100,000.

Bitcoin has been stuck between the $102,750 resistance level and the $91,200 support since falling from its December 17 all-time high of $108,364.

Let's take a closer look at the reasons why the BTC price is stuck today.

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Low “shark” activity and liquidity

Ahead of the inauguration of US President-elect Donald Trump, the crypto market appears to be in a tailspin.

“Bitcoin has been struggling to break the much-desired $100K psychological resistance level,” Sentiment analyst Briank said in a Jan. 10 analysis note as the crowd gets restless again.

According to the analyst, the lower price action seen in Bitcoin is due to a decrease in purchases of Bitcoin wallets that hold between 100 and 1,000 BTC, also known as “sharks”.

Brianq says that the “huge accumulation” of these entities is responsible for Bitcoin's 91% rally between October 11 and December 17, when it reached its current peak.

As of December 18, 2024, purchases of this group have been discontinued.

Additionally, uncertainty surrounding the new US administration and anticipation of significant data releases have reduced global liquidity.

The chart below shows Global Liquidity (Global M2), an indicator that tracks the growth of the global money supply from major central banks relative to the value of Bitcoin, as of October 2023. Global M2 has been stuck in a narrow range over the past three weeks. .

Reducing global M2 means less money entering the global system, preventing spending on known “risky assets” like Bitcoin. This can reduce transaction volumes, making bitcoin's price movements less volatile.

Commenting on Bitcoin's recent price action, technical analyst Kevin said, “The battle right now is between bullish divergences and the currency.”

Related: Microstrategy's Bitcoin Debt Cycle: Stroke of Genius or Risky Gamble?

Bitcoin is stuck between two trends

On January 7, Bitcoin price fell below the support provided by the 50-day simple moving average (SMA), as shown in the daily chart below.

This move, however, saw a key support level from November 20 when BTC/USD found support at $92,000.

Bitcoin price is fighting against the 50 SMA resistance, which needs to be overcome to increase the chances of breaking out of the current consolidation pattern.

IntoTheBlock's additional data shows the friction between buyers and sellers. The in/out of the money around the price (IOMAP) indicates that the price is stuck between two significant levels.

Namely, these are the $92,000 to $94,800 asking zones, with approximately 887,960 BTC already purchased by 1.1 million addresses.

On the downside, the supplier congestion zone between $94,980 and $99,680 will provide a strong barrier for bulls. This is where approximately 2.13 million BTC were previously purchased by 2.36 million addresses.

Note that these price levels are below or above the spot price, indicating a battle between bears and bulls.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.