Bitcoin holds around $87,000 amid a noticeable decline in network activity and exchange inflows, indicating compressed liquidity and increased volatility risk. Meanwhile, the market shows low participation from short-term traders and investors, causing the price to remain stuck within a narrow range and unable to sustainably break resistance above $90,000.
Current Bitcoin Market Situation
The market is experiencing low engagement: despite stable prices, there is a reduction in fund movements and transfers between addresses. This is reflected in decreased inflows to key exchanges and a drop in active addresses, signaling reduced short-term liquidity and potential volatility during sharp market events.
Decline in Bitcoin Network Activity
Data shows the 30-day moving average of active addresses has fallen to approximately 807,000 — the lowest level in the past year and a clear indicator of reduced participation from retail and short-term players. Simultaneously, deposits and withdrawals on Binance have decreased, reinforcing the impression of a market in a state of "weather uncertainty," where long-term holders are reluctant to sell and aggressive buying has paused.
Changes in Exchange Liquidity
Liquidity on exchanges has contracted: as of November 24, seven-day total inflows were $21 billion on Coinbase and $15.3 billion on Binance, but by December 21, Coinbase inflows dropped nearly 63% to $7.8 billion, and Binance inflows decreased to $10.3 billion. This reduction in inflows indicates a decline in new liquidity volume and lower short-term trading activity.
Technical Analysis and Possible Scenarios
From a technical perspective, Bitcoin remains range-bound between $85,000 and $90,000 and cannot hold above resistance. The price trades below the monthly VWAP, adding a neutral-cautious tone to the market outlook. Key liquidity zones act as two "magnets": the lower buy-side FVG $85,800–$86,500 contains a cluster of credit risk — about $60 million in long positions at liquidation risk, while the upper sell-side FVG $90,600–$92,000 holds roughly $70 million in short positions that could also be liquidated if the price moves upward.
Why This Matters
For miners operating 1–1000 devices, the decline in inflows and activity means that when selling coins on exchanges, you may encounter reduced market depth and greater slippage. Simultaneously, the presence of liquidity clusters in FVG zones means short-term price impulses can trigger rapid liquidations among leveraged traders, increasing volatility even without changes in the underlying price.
What to Do?
- Monitor exchange inflows and the 30-day moving average of active addresses to assess changes in liquidity and market participation.
- If selling on exchanges, break large orders into smaller parts and use limit orders to reduce slippage amid thinner market depth.
- Consider risks related to liquidations in the $85,800–$86,500 and $90,600–$92,000 zones; avoid unnecessary leverage and control position sizes.
- Use local price and volume overviews on your chosen exchange before major operations — liquidity conditions may vary between platforms.
- Compare technical levels and dynamics with published analyses on levels and scenarios to make more informed decisions.
This article is analytical and does not constitute investment advice. When making trading or operational decisions, consider your own goals and risks.
For a detailed breakdown of levels and volumes, see technical analysis and levels, and to compare with recent price reactions, read the piece on how the price hits resistance at $87K. You can also explore the context of declining activity in the article why Bitcoin is falling.