Bitcoin (BTC) is entering another tense phase, with CryptoQuant warning that the market’s supply-demand imbalance has sharpened in recent weeks and now looks less like a clean reset and more like the kind of chaotic decline that could trap late buyers. In its latest note, the analytics company He said The current setup is very different from the slower easing that followed previous shocks in the Zone 1 and Zone 2 patterns.
It instead resembles the squeeze seen when Bitcoin previously traded in the $80,000 to $90,000 area. CryptoQuant added that components of a potential bottom are starting to emerge, but liquidity is still too weak to support a convincing reversal, meaning any short-term bounce could end up being a trap for bulls. The background is important because Bitcoin is still trading in a volatile range.
Latest market snapshot offers Bitcoin About $71,790, after moving between an intraday low of $68,943 and a high of $71,950. This keeps the world’s largest cryptocurrency close to the psychologically important $70,000 area, but well short of the frenetic enthusiasm that drove it to a record high earlier in the session. For traders, this is important because Bitcoin is no longer in a clean trend. It is in a range where buyers and sellers are frequently fighting for control.
The recent news has done little to calm nerves. Bitcoin briefly fell below $70,000 before rebounding, as markets digested a more hawkish Federal Reserve outlook and higher oil prices tied to geopolitical tensions. Data from SoSoValue open Bitcoin exchange-traded funds recorded outflows of $66.67 million on Tuesday, though March still showed net inflows overall, showing how quickly sentiment can shift from day to day. In other words, institutional demand has not disappeared, but has become less trustworthy as macroeconomic uncertainty increases.
Signs of bottom formation?
The chart shared by CryptoQuant tells a similar story. Bitcoin’s recent movements appear chaotic and uncertain. It keeps trying to push up, but each time it does, the gains quickly disappear and the price drops again. The recent highs have not continued, and the market continues to drift towards the same support area over and over again. This usually indicates a market that is still searching for stability and not a market that is ready to take off.
If you look closely at the chart, you will find that each bounce is a little weaker than the previous one. Recovery periods are shorter, less convincing, and do not carry the same strength as they once did. It’s the kind of slow loss of momentum that traders tend to notice early on, and it’s a sign that buyers are becoming more cautious and that the market may need more time before any real rally. Move up It could happen. This is an inference from the chart, but closely aligns with CryptoQuant’s warning that liquidity is still insufficient for a permanent trend reversal.
Right now, Bitcoin traders are faced with a familiar but uncomfortable setup. Prices are high enough to attract buyers on dips, but not strong enough to inspire complete confidence. The message of Cryptoquant is not that a bottom is impossible, but that the market may not have done enough work yet to make any recovery credible. Until liquidity improves and spot demand strengthens, Bitcoin could continue to swing sharply, with highs sparking optimism before quickly encountering resistance.
