- Bitcoin faces increased volatility between $70K and $80K due to supply ‘air pocket’
- Less than 2% of Bitcoin’s supply exists between $70K and $80K
- Bitcoin could revisit and consolidate in previously skipped price ranges
- Approximately 25% of Bitcoin’s supply is currently at a loss
- The current macroeconomic environment and market sentiment may increase volatility
Bitcoin faces increased volatility between $70K and $80K due to supply ‘air pocket,’ where less than 2% of total supply is concentrated. Also, about 25% of Bitcoin supply is in unrealized losses, especially among investors who purchased the asset in the last 155 days. It creates risks for even more volatility, especially if things move into the capitulation zone. At the same time, macroeconomic events that are hitting all markets so hard don’t seem to be going to stop, creating even more tension.
More About the Dangers for Bitcoin in the $70K and $80K Range
So, from a record over $100K, we have been seeing it in the $90K-$80K for over a month now, but after the recent decisions of the Trump administration, all stock markets and crypto markets have also experienced a noticeable drop. Now, we are caused to see Bitcoin in the $70K-$80K and it seems the dangers are not over yet.
In particular, Bitcoin risks experiencing problems in the low liquidity zone, otherwise known as the ‘air pocket’ with less than 2% of Bitcoin’s supply there. For beginners, this is a dangerous zone for an asset where there are few historical trades, little trading volume, and, as a result, weak market support, causing the asset to figuratively ‘hang in the air’.
This can cause the price to move very unpredictably, even from individual trades, especially if algorithmic traders get involved and try to take advantage of this space. So there are several scenarios – to break sharply down to zones with historical volume (e.g. $64K-$68K) or to bounce back sharply if limit orders become active.
It is also worth considering such a factor as ‘price memory,’ when the asset returns to past consolidation levels. If we consider the nearest ones, there is a probability that Bitcoin will still return to the level of about $82K, but as you have already realized, this is hindered by the factors mentioned above.
To be honest, it does not add optimism and the environment in which all this is happening. Donald Trump’s recent harsh decisions on tariffs have played a key role in the collapse of markets around the world, and so far there are no hints that he will give up on that.
My personal opinion is that it won’t happen until the FED lowers the interest rate enough favorable to take out a new loan for the US, although this is only one possible view of the situation.
Conclusion
Well, a very acute situation indeed amidst strong overall tensions. It requires very close attention and cold reckoning. Be aware, and always assess the situation comprehensively, diversify risks, and adapt your strategy to daily changes.
