The Liquidity Trap: Why Bitcoin Needs a $79K Flush Before the 2026 Upswing

Bitcoin (BTC) is exhibiting extremely corrective price action, characterized by low-conviction pumps and sharp dumps that are primarily designed to hunt liquidity rather than establish a clear trend. This slow, range-bound movement causes substantial liquidity to accumulate on both sides of the market, necessitating a decisive sweep before a genuine impulsive move can occur.

For a healthy bullish continuation into 2026, the optimal scenario involves price violently taking out the established lower liquidity pockets. This "shakeout" would wipe out leveraged long positions before reversing impulsively. The critical liquidity zones to monitor are the recent lows at $87,874, $83,672, and the deepest level at $80,451.

While frustrating for those awaiting immediate upward movement, taking out these lows first is technically superior. An impulsive reversal—defined by strong, directional moves with heavy volume and shallow pullbacks—can only follow the exhaustion of selling pressure and the liquidation of overly leveraged longs. Analysts should maintain patience, allowing the price to play out this bottoming formation, as the overall macro structure remains favorable for a bullish continuation.$BTC