- Bitcoin’s weekly structure hints at easing bearish sentiment, with consistent daily candle closures averaging $82.60k, signaling underlying demand strength.
- The Relative Strength Index (RSI) remains below overheated levels, suggesting room for further upward momentum without triggering immediate sell-offs.
- On April 11, net outflows of 35,758 BTC from exchanges at $83,403 per BTC indicated strategic accumulation, a potential sign of a bottom formation.
- However, a significant liquidity cluster above current price levels poses risks of a downside liquidity sweep, potentially setting up a bull trap.
- Market makers may exploit overcrowded long positions, with 77% of liquidation levels concentrated near the $86.50k liquidity zone.
- The NUPL (Net Unrealized Profit/Loss) metric shows Bitcoin oscillating between optimism and anxiety, reflecting market participants’ unease about unrealized profits.
- Without a decisive breakout, Bitcoin remains vulnerable to further volatility, liquidation cascades, and potential bearish moves.
Bitcoin’s Weekly Structure: Signs of Strength Amid Uncertainty
Bitcoin’s recent price action suggests a subtle shift in market sentiment, with bearish pressure showing signs of easing. Over the past week, Bitcoin has consistently closed daily candles at an average price of $82.60k. This steady performance highlights a strong underlying bid, indicating that demand is quietly absorbing sell-side pressure.
Adding to this bullish narrative, the Relative Strength Index (RSI) remains below overheated levels. This suggests that Bitcoin still has room to climb without triggering widespread profit-taking. The combination of steady price action and manageable momentum levels paints a picture of cautious optimism, where buyers are gradually regaining control.
Strategic Accumulation and the Case for a Bottom Formation
On April 11, a notable event unfolded: all exchanges recorded net outflows of 35,758 BTC at an average price of $83,403 per Bitcoin. Such significant outflows are often interpreted as a sign of strategic accumulation, where large holders move assets off exchanges to long-term storage. This behavior typically signals confidence in future price appreciation and hints at the formation of a potential bottom.
Theoretically, this accumulation creates a demand wall that could absorb sell-side pressure and limit downside risk. However, while these signals are encouraging, they are not definitive. The market remains a complex ecosystem where liquidity dynamics and sentiment shifts can quickly alter the landscape.
Liquidity Clusters and the Risk of a Bull Trap
Despite the signs of accumulation, Bitcoin faces a significant challenge in the form of a liquidity cluster forming above current price levels. As Bitcoin approaches the $86.50k zone, this cluster could act as a magnet, drawing price action toward it. However, this is not necessarily a bullish development.
A closer look at market data reveals that 77% of liquidation levels around this zone are long positions. This concentration of leverage creates a high-risk environment where market makers could exploit overcrowded positions. By triggering forced liquidations, they could drive prices lower, creating a classic bull trap scenario. In such a setup, Bitcoin might briefly break above the liquidity zone, only to reverse sharply, leaving overleveraged traders in the red.
Market Sentiment and the Role of NUPL
The Net Unrealized Profit/Loss (NUPL) metric offers valuable insights into Bitcoin’s current market sentiment. Since March 7, Bitcoin has remained in the ‘Optimism’ phase, indicating that a significant portion of the market is in unrealized profit. This phase often coincides with accumulation by large holders, as they anticipate further price increases.
However, every time Bitcoin approaches the $86k–$87k range, the NUPL shifts into the ‘Anxiety’ phase. This reflects growing unease among market participants, as unrealized profits come under pressure. For example, on March 25, Bitcoin briefly reclaimed $87.5k, but the NUPL quickly reversed into Anxiety, signaling that traders were hedging or realizing profits.
As Bitcoin revisits this critical zone, a similar pattern could emerge, with market sentiment turning cautious. This shift could lead to increased selling pressure, further complicating Bitcoin’s path forward.
The Path Ahead: Volatility and Uncertainty
Bitcoin’s current price structure remains precarious. With 77% of liquidations concentrated in long positions near the $86.50k liquidity cluster, the risk of a downside sweep is significant. Such a move could trigger a cascade of forced liquidations, driving prices lower and amplifying market volatility.
For Bitcoin to escape this range-bound structure, it needs a decisive breakout backed by strong conviction and fresh capital inflows. Without these elements, the market remains vulnerable to further downside risks. The presence of a significant liquidity cluster and the oscillation between optimism and anxiety in the NUPL metric underscore the fragility of the current setup.
Conclusion
Bitcoin’s recent price action reflects a delicate balance between bullish and bearish forces. While signs of accumulation and steady demand suggest the potential for a bottom formation, the presence of significant liquidity clusters and concentrated long positions introduces substantial risks. Market makers are likely to exploit these vulnerabilities, potentially triggering a downside sweep and setting up a bull trap.
The NUPL metric further highlights the market’s uncertainty, with sentiment oscillating between optimism and anxiety. Until Bitcoin decisively breaks out of its current range, the risk of volatility and liquidation cascades remains high. For now, the market’s next move hinges on whether buyers can muster the conviction to push Bitcoin beyond its critical resistance levels.
