Bitcoin drops below $93,000 as sell-side liquidity declines to 6.6 months, with the crypto market down 1.61%. Explore key trends, trading volume, and market movers in this analysis.
Sunday marked a turbulent day for bitcoin prices, with the leading cryptocurrency dipping to a low of $92,941 per coin by 5:30 p.m. ET. The decline contributed to a 1.42% drop in bitcoin’s value over the last 24 hours, while the broader cryptocurrency market fell by 1.61%.
Bitcoin’s Sell-Side Liquidity Plummets to 6.6 Months
According to Cryptoquant data, bitcoin’s sell-side liquidity is waning, with the Liquidity Inventory Ratio dropping from 41 months in October to just 6.6 months. This decline aligns with market rallies seen in Q1 and Q4 of 2024, suggesting a potential easing of selling pressure in the near future.
On Sunday, bitcoin attempted to regain momentum after dropping below $93,000, a stark contrast to its value of $95,529 the previous day. Trading volume has been subdued due to the holiday season, clocking in at $26.18 billion over the past day.
Oscillator Readings and Moving Averages Signal Mixed Trends
The 1-day BTC/USD chart revealed neutral signals from key oscillators. The relative strength index (RSI) stood at 43, while Stochastic was at 14, and the average directional index registered at 26.
Moving averages (MAs) from the 10- to 50-day range flashed bearish signs, potentially indicating short-term challenges for bitcoin. However, long-term MAs retained a bullish outlook, hinting at possible recovery over an extended timeline.
Lukewarm U.S. Interest and Declining ‘Kimchi Premium’
Cryptoquant reports show a negative Coinbase premium gap of $169.18, reflecting muted U.S. interest likely due to the holiday lull. Meanwhile, the ‘Kimchi premium‘ in South Korea indicating higher BTC prices compared to global markets dropped from 3.38% on December 25 to 1.3%.
Top Trading Pairs and Market Overview
Tether (USDT) led as bitcoin’s most traded pair, followed by the U.S. dollar, FDUSD, USDC, and the Korean won. The Korean won accounted for 2.09% of bitcoin’s trading volume over the weekend.
The total crypto market capitalization stands at $3.27 trillion, down 1.61% from the previous day. While bitcoin’s decline was limited to 1.42%, other cryptocurrencies faced more significant losses. XRP dropped over 3%, BNB fell 4.27%, and DOGE dipped 2.25%.
Biggest Movers in the Crypto Market
FARTCOIN emerged as the biggest loser, plummeting by 15.27%. Bitget’s BGB token fell by 12.62%, while the newly launched PENGU coin dropped by 10.90%.
Conversely, Phala Network (PHA) surged by 18.26%, making it the day’s top performer. Surprisingly, the FTX Token (FTT), linked to the defunct FTX exchange, gained 12.77% against the U.S. dollar, defying broader market trends.
Derivatives Market Liquidations
The market downturn led to $126.39 million in liquidations, with $90.64 million coming from long positions on Sunday.
Outlook for Bitcoin and the Crypto Market
Despite short-term bearish signals, the decline in sell-side liquidity and longer-term bullish moving averages offer a glimmer of hope for a market rebound. As the holiday lull passes, increased trading activity may provide clearer direction for bitcoin and the broader crypto market.
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