After weeks of sideways movement, the market may finally be signaling whether or not a bottom is forming.
When markets consolidate over extended periods, leverage often occurs in key price zones. With Bitcoin [BTC] While the price has hovered around $75,000 for more than four weeks, liquidity clusters continued to form as traders positioned themselves for their next big move.
Data from Alpharactal reinforces this design. As the chart below shows, Bitcoin is now moving into a liquidation compression zone. The aggregate liquidation levels heatmap shows liquidation pressures of almost $14.3 billion around current prices, with longs and shorts remaining near balance.
Yet the positioning underneath tells a slightly different story.
Shorts sit above price and remain loosely distributed, while long liquidity is aggressively below Bitcoin in tighter margins. The chart shows over $14 billion of long liquidity concentrated around the $72k-$74k zone, while short liquidity spreads across $78k-$88k.
At Bitcoin’s current price, a drop of just 6-7% could trigger one of the largest long liquidation cascades currently visible on aggregate exchanges. With so much liquidity at the bottom, it naturally becomes an important area to watch for the increase in volatility. In these types of situations, Bitcoin bulls typically intervene early and try to defend those clustered long zones.
Interestingly, this is often the moment when markets begin to form the first real confirmation of a local bottom.
Liquidity under Bitcoin meets weak demand
When short liquidity piles up, whales usually buy the dip, causing higher price appreciation.
And with around $14 billion in short clusters sitting between $78,000 and $88,000 in Bitcoin, a move towards those levels, and potentially past $90,000, would normally be the obvious target for bulls. But the current price action shows a more cautious market, with less aggressive spot demand compared to previous moves.
On the institutional side, US spot ETFs have seen net outflows almost every day since May 7, indicating continued selling pressure over the past two weeks. At the same time, CryptoQuant points to weaker demand in the spot market, with Bitcoin’s apparent demand (30-day sum) falling back to early January levels, indicating reduced purchasing power in the market.
According to AMBCrypto, this weak demand is the first “real” sign that a bottom may still not have been reached.
The logic is simple: without strong spot buying, bulls will not step in to absorb liquidity, even with a long position of almost $14 billion between $72,000 and $74,000, just 6-7% below the current price. If dip buyers remain absent, these long positions risk a sharp wave of liquidation.
That is why some Kalshi traders prices a move towards $54k in Bitcoin doesn’t seem completely off the table.