I previously pointed out concerns about Bitcoin’s supply-demand imbalance in mid-March. Since then, the situation has worsened, and the pace of the imbalance has become notably sharper.
This looks clearly different from the periods where the imbalance gradually eased after the initial shock in Zone 1 and Zone 2. Instead, it resembles the pattern we saw around the $80K–$90K range.
At the moment, various data points suggest that the conditions for a potential bottom are forming. However, the level of liquidity required to actually drive a trend reversal still appears insufficient.
There may be short-term price rebounds that create optimism, but in the end, they are likely to turn out to be bull traps.
Written by Mignolet