Bitcoin [BTC] is once again at a pivotal point in its price trajectory. Institutional demand through Spot ETFs has surged since mid-April, pushing crypto inflows to new heights and supporting BTC’s steady climb toward the $105K mark. However, lurking beneath the bullish surface is a potential liquidity trap that could disrupt Bitcoin’s rally if momentum fades.
Institutional Inflows Push Bitcoin Higher
According to recent on-chain data, Bitcoin Spot ETFs have absorbed nearly $1 billion in net inflows over the past month. The surge in institutional participation has been a significant tailwind, helping the king coin break past crucial resistance zones and maintain a consistent upward trend.
The price action closely followed ETF behavior: when inflows grew, prices climbed. But as some analysts warn, if inflows stall or reverse, BTC’s current price levels could become unsustainable.
Key Price Zones: $101K–$105K Consolidation
After consolidating in prior ranges between $83K–$86K and later $93K–$96K, Bitcoin has now settled into a tight range between $101K and $105K. A breakout above $105K could open the door for a fresh rally and possibly all-time highs.
However, if BTC dips below $101K, it could trigger a short-term bearish move toward the lower support zones. This makes the current range a crucial battlefield for traders and institutions alike.
Falling Liquidity Points to Potential Price Squeeze
A major development in the current BTC market is the depletion of liquidity across exchanges, especially on the sell side. With fewer coins available for sale and declining OTC activity, supply is tightening—setting the stage for a potential supply shock if demand continues to climb.
This liquidity squeeze could benefit bulls in the long term, especially in 2025, as scarcity adds fuel to the upside. However, it also means price volatility may increase, especially around major liquidation levels.
Liquidation Zones Add Risk Below $101K
On-chain data also highlights key liquidation points in BTC perpetual contracts. Medium to high leverage longs are stacked between $98.6K and $100.5K, while short liquidations are clustered just above the current price, around $105.7K.
Importantly, there’s a greater density of high-leverage liquidity below $101K, increasing the likelihood of cascading liquidations if BTC drops below this threshold. A significant drawdown could occur before any meaningful recovery or supply shock-driven rally.
Final Outlook
Bitcoin remains bullish in structure, backed by strong ETF inflows and dwindling market supply, which could support a breakout to new highs. However, with prices hovering in a tight range and deep liquidity traps lurking below, traders should remain cautious.
The next few sessions could determine whether BTC smashes through $105K to chart new territory—or slips below $101K, triggering leveraged liquidations and short-term pain.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
