Bitcoin traded sideways below $89,000 after a 2% bounce, but the move lacks conviction and feels more like a pause than a restart.
Liquidity is shrinking across channels. Spot ETFs barely saw inflows yesterday (less than $7 million) after $1.3 billion of outflows last week, while total crypto futures open interest slid to $128 billion and bitcoin futures to about $58 billion, the weakest levels since early January, according to CoinGlass.
On a positive note, on-chain whales continue to accumulate Bitcoin, albeit at a gradual pace. According to BGeometrics, the number of whale addresses holding between 1,000 and 10,000 BTC increased by 49 over the past month, reaching 1,955 as of Sunday. This figure is close to its highest level since November.
That combination matters because liquidity is the fuel for any sustainable rally. When upward moves arrive on thin demand, they tend to be reversed violently if a catalyst spooks markets.
A severe U.S. ice storm has triggered a massive collapse in Bitcoin’s hashrate, plummeting from 1.073 ZH/s to 700 EH/s (per SoSo Value data) as major mining hubs like Texas face power grid disruptions and soaring electricity costs.
Companies such as MARA and Foundry Digital have been forced to halt operations to avoid unsustainable expenses, analysts told Beincrypto that a prolonged freeze could trigger a market sell-off. If these mining firms are forced to liquidate their Bitcoin holdings to cover fixed operating costs during the downtime, it may exert significant downward pressure on prices amidst already tight liquidity.
Liquidity is retreating as the market braces for a volatile week. Tomorrow’s Fed meeting is the first major hurdle, while surging JGB yields continue to drain leveraged liquidity from the system.
Political shocks threaten market plumbing too. The risk of a partial US government shutdown is rising, which could delay data and inject volatility into risk assets ahead of key economic releases.
Finally, geopolitical escalation remains the wildcard. Reporting has flagged intensified Iran rhetoric and preparations that could raise the probability of a wider Iran–Israel confrontation, a development that would likely trigger oil and risk premia spikes and roil crypto and FX markets.
In short, bitcoin’s current range is a fragile truce. Durable upside needs steady spot demand, calmer funding conditions and a clear fade of the event risks that are currently shrinking liquidity and shortening traders’ time horizons.
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