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Bitcoin is trading at a pivotal level after losing key support zones, triggering concerns among investors about a potential deeper correction. After spending over two weeks consolidating in a tight range, BTC broke down sharply, reaching lows around $112,000. This sudden drop has shaken market sentiment, with some analysts warning of further downside if demand fails to absorb the recent selling pressure.

However, not all indicators are flashing red. Top analyst Axel Adler shared compelling data revealing that, starting from the end of February 2024, the average Exchange Netflow on centralized exchanges (CEXs) has been predominantly negative. In fact, Netflows were positive on only two occasions since then, indicating that demand has consistently outpaced supply during this period. This sustained outflow of Bitcoin from exchanges signals strong accumulation trends, as investors continue to withdraw BTC for long-term holding rather than selling into the market.

While the current price action has sparked fear of a bearish reversal, the underlying demand dynamics suggest that the broader uptrend may still be intact. Whether Bitcoin can defend the $112K support zone and recover in the coming sessions will be crucial in determining the next phase of its market cycle.

Supply Shortage Deepens As Bitcoin Accumulation Persists

According to analyst Axel Adler, Bitcoin’s supply dynamics continue to paint a bullish long-term picture despite recent price volatility. Adler highlights that coins have been consistently bought off exchanges for nearly a year and a half, significantly reducing the available liquidity in the spot market. This persistent outflow has gradually created a supply shortage, which has been a key driver behind Bitcoin’s impressive growth over the past months.

This accumulation trend remains active, with investors — particularly long-term holders and institutional players — continuing to withdraw BTC from exchanges at a steady pace. As liquidity dries up, even moderate demand can trigger outsized price moves, which has fueled much of Bitcoin’s upward trajectory.

However, Adler also points out a growing challenge: as Bitcoin approaches historically overvalued levels, selling pressure is beginning to surface. Short-term holders and profit-takers are becoming more active, especially as BTC tests key psychological price levels. This friction between dwindling supply and increasing profit-taking behavior could lead to heightened volatility in the coming weeks.

If accumulation continues to outpace supply inflows, the broader uptrend could remain intact. Yet, the overvaluation signals suggest a period of consolidation or corrective moves is necessary to reset market conditions before Bitcoin attempts another push toward new highs.

Price Analysis: Key Levels To Watch

Bitcoin is currently trading at $114,937 after facing a sharp correction from its recent all-time high of $123,000. The daily chart shows that BTC lost the critical $115,724 support level, which has now turned into immediate resistance. The price is attempting to retest this level, but the rejection from the 50-day moving average around $115,100 suggests that bulls are struggling to regain momentum.

The price structure reveals a clear breakdown from the tight range formed between $115K and $122K, followed by a lower high formation that indicates weakening bullish strength. Volume has been declining during this rebound attempt, signaling a lack of strong buying interest at current levels. The 100-day moving average at $108,100 serves as the next major support if BTC fails to reclaim $115K.

On the upside, reclaiming the $115,724 level with strong volume would be a bullish sign, potentially triggering a move back toward the $120K-$122K resistance zone. However, failure to break above this level could confirm a bearish retest and increase the likelihood of BTC revisiting the $112K-$110K support range in the coming sessions.

Featured image from Dall-E, chart from TradingView

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March 24th Bitfinex alpha | BTC range is constrained as fluidity dries

Bitcoin continued trading within weeks of trading last week, with prices briefly below their weekly opening before rising 4.2%. The optimistic news that could possibly come out of the Federal Open Market Committee had some initial strengths, but as the meeting took place, there was a “sell” deal. He further emphasized that Bitcoin is sensitive to macro-driven catalysts rather than organic momentum.

As volatility is reduced and liquidity becomes less, Bitcoin’s short-term price measures are increasingly reflecting the behavior of macro-sensitive assets. The contraction of hot supply metrics from 5.9% in December 2024 to 2.8% today, bringing with cooling of speculative participation, coins change hands and liquid capital retreat from the market. Similarly, daily exchange inflows have fallen by more than 54% from the cycle peak, reflecting broader investors’ hesitations, reducing short-term risk appetite. As Bitcoin is integrated near the bottom edge of its range, it is clear that meaningful price movements are likely to depend on updated institutional flows and macro clarity, particularly for liquidity conditions and central banking policies.

The US economy also shows signs of increasing pressure. Trade tensions, slowing growth and careful consumer sentiment converge, creating an increasingly vulnerable outlook.

The Federal Reserve also stabilized benchmark interest rates between 4.25-4.5%, reflecting its waiting approach amid growing uncertainty.

Industrial production surged in February, driven primarily by defensive stockpiling ahead of expected tariffs. This bump in manufacturing power looks positive, but the Fed considers it to be temporary and rooted in precautions rather than sustainable demand.

Meanwhile, the conference committee’s main economic index has declined for the third consecutive month, weakening the basics of the economy. Consumer expectations, new manufacturing orders, and stock market declines – particularly the decline in technology and small-cap stocks portrays a photograph of increased risk aversion. Bond yields also slipped after the Fed meeting, reflecting expectations for slower investors’ growth and potential policy pivots.

The crypto industry as a whole has seen significant changes last week, showing clarity in growing institutional support and regulations. The SEC officially suspends its lawsuit against Ripple Labs, ending a multi-year legal battle over XRP status. The move caused a 13% price surge, renewing investors’ trust.

In another legal reversal, the U.S. Treasury lifted sanctions on tornado cash after the court ruled that the initial ban had deferred the legal boundary. This marks a victory over privacy advocates and reiterates debate over the limitations of financial surveillance. With momentum growing, President Donald Trump has been the first US president to compete in the crypto summit, seeking to confirm stable Bitcoin reserves and pledge regulatory clarity. Together, these developments reflect mature industries entering new stages of legitimacy and growth.

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