Emre Yumlu 
Bitcoin approached its lowest level in six months over the weekend as tightening liquidity conditions pressured the broader crypto market. Despite the sharp decline, analysts argue that the downturn may be temporary and could set the stage for a potential rebound.
Liquidity Pressures Trigger Market Retreat
The leading cryptocurrency fell to nearly $93,000 on Sunday before recovering to around $95,285 at the time of writing — its weakest level since early May.
Over the last 24 hours, the crypto market saw $619 million in liquidations, including $243 million from Bitcoin positions alone. Meanwhile, the Crypto Fear & Greed Index slipped to 10, signaling a state of “extreme fear.”
Derek Lim, Research Director at Caladan, attributes the sell-off primarily to liquidity shortages. He notes that the recent U.S. government shutdown left the Treasury General Account elevated, reducing liquidity across markets. Lim expects this pressure to ease as government spending resumes and postponed payments flow back into the system. He also points to Japan’s proposed 17 trillion yen ($110 billion) stimulus package as a potential catalyst for improved global liquidity.
Funding Stress Adds to Bearish Sentiment on Bitcoin
Edward Carroll, Head of Markets at MHC Digital Group, highlights growing stress signals in treasury bill spreads, repo markets, and other funding indicators — patterns reminiscent of 2018 and 2019. According to Carroll, crypto tends to react to such shifts ahead of traditional markets.
The weakened probability of another Federal Reserve rate cut in December and the $1.1 billion outflow from U.S. spot Bitcoin ETFs last week amplified the downward momentum.
Still, Carroll maintains that the mid-term outlook remains encouraging. He points to Bitcoin’s increasingly recognized role as a form of digital gold, expectations for a future liquidity recovery, and ongoing institutional engagement.
Bitcoin Analysis: Key Support Levels to Watch
BTC Markets analyst Rachael Lucas says Bitcoin is currently testing support near $94,000, with a more critical floor between $88,000 and $91,000. Lucas notes that while these levels signal a technical bear market, previous cycles have experienced similar drawdowns before pushing to new highs.
Lim adds that the 50-week simple moving average, now near $103,000, has become a crucial indicator. A weekly close below this level is often viewed as bearish, though he stresses that the true signal depends on whether Bitcoin remains below it for an extended period.
Altcoins Remain Under Pressure
Altcoins also faced notable losses. Ethereum slipped to $3,144, marking a 13.4% weekly drop. XRP traded around $2.23, while Solana fell 17% over the same period to $138.7.
Lim explains that altcoins typically require “excess liquidity” and “euphoric sentiment” to perform strongly — neither of which is currently present. As a result, he believes an altcoin season is unlikely in the near term.
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