Market analysis firm Swissblock has issued a warning about Bitcoin’s liquidity status, noting its rapid decline. This may negatively affect its market value.
Impact of On-Chain Liquidity Decline on Bitcoin
According to Swissblock's report, there is a significant decline in Bitcoin's on-chain liquidity. This could exert pressure on the cryptocurrency's price. Low liquidity may lead to a shortage of buyers, potentially causing the price to drop due to sell orders. Swissblock emphasizes the seriousness of this situation while noting that Bitcoin's long-term bullish structure remains intact.
Long-Term Trend vs. Short-Term Risks
Swissblock’s report highlights that Bitcoin’s long-term upward trend remains unbroken. The analysis shows that risk signals remain at zero, indicating a positive overall market structure. Despite recent liquidity losses, long-term formations are preserved. However, in the short term, low liquidity conditions can lead to increased price volatility.
Investor Recommendations
Experts advise investors to closely monitor market liquidity dynamics and prepare for potential short-term fluctuations. If liquidity recovery does not occur in the near term, price volatility for Bitcoin is anticipated to increase.
Swissblock's analysis of Bitcoin’s liquidity situation underscores the importance of liquidity for price stability in the market. Investors are advised to remain vigilant to changes in liquidity.
