Bitcoin continues to struggle below the $90,000 level and has been unable to regain any higher ground as bulls focus on defending the current demand zone. After a sharp correction from recent highs, price trends have entered a consolidation phase and appear relatively stable on the surface. Volatility has diminished, and short-term price movements suggest the market is pausing rather than definitively collapsing. However, this apparent stability can be misleading.
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According to XWIN Research Japan’s CryptoQuant report, on-chain data shows growing structural risks behind the scenes. The Inter-Exchange Flow Pulse (IFP), an indicator that tracks Bitcoin movements between exchanges and acts as a proxy for internal market liquidity, has turned red.
In such an environment, once direction is established, price movements tend to become sharper and less orderly. Decreasing exchange balances may limit immediate selling pressure, but also amplify the impact of sudden demand or forced liquidations.
This change indicates a clear slowdown in capital circulation across trading venues and suggests a worsening liquidity situation.
Structural vulnerabilities due to inter-exchange flow pulse signals
of report The Inter-Exchange Flow Pulse (IFP) measures how actively Bitcoin moves from one exchange to another, explaining that it acts as a proxy for internal market liquidity and capital circulation. When IFP rises, funds rotate efficiently between venues, arbitrage opportunities are quickly absorbed, and liquidity providers keep their order books thick.
In such situations, price discovery tends to be smoother and volatility remains subdued. In contrast, when IFP falls, the “blood flow” within the market weakens. Capital becomes static, liquidity becomes fragmented, and prices become increasingly sensitive to relatively small trades.
This deterioration in liquidity has been accompanied by historically low foreign exchange balances. A reduction in sellable supply may initially act as price support, but it may also thin the order book. When the price starts to move decisively in either direction, slippage increases and volatility accelerates.
With leverage still rising across derivatives markets, volatility is now driven less by directional certainty and more by the magnitude of the forced reaction.
Historically, periods when IFP turned red produced It’s a sudden correction and sharp price fluctuation, not a clean trend. Therefore, the core risk today is not active distribution but structural weakness. Until liquidity among exchanges improves, Bitcoin will remain vulnerable to sudden large movements, making leveraged positioning especially risky in the current market structure.
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Bitcoin price stabilizes below major moving averages
Bitcoin’s 4-hour chart highlights the market’s consolidation after a sharp correction move. After an aggressive sell-off in late November, BTC found a local bottom near the $82,000-$83,000 zone, where strong demand intervened and caused a rebound. However, that recovery quickly lost momentum and the price is now hovering below the descending moving average.
Bitcoin is currently trading at levels between $89,000 and $90,000 and has failed to regain its 200-period moving average on the 4-hour time frame multiple times. The 50 and 100 moving averages are also sloping to the downside, acting as dynamic resistance and reinforcing the near-term bearish structure. Every attempt to move higher has been met with selling pressure, suggesting that the bulls lack confidence in current levels.
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Volume has shrunk significantly during this consolidation stage, indicating reduced participation and indecision among traders. This usually precedes an increase in volatility, especially when prices are compressed below large resistance levels. Structurally, BTC remains vulnerable as long as it trades below the $92,000 to $94,000 zone. This zone previously acted as support, but now limits any ascent attempts.
On the downside, the $87,000-$88,000 range has emerged as immediate support. A decisive break below this area could reopen the path to the $84,000 area. Until a clear breakout occurs, Bitcoin is in a precarious balance between circulation and foundation building.
Featured image from ChatGPT, chart from TradingView.com
