Bitcoin’s (BTC) price recovered by 3.62% on Aug. 21, but it currently faces overhead resistance at $61,700. Meanwhile, the BTC fear and greed index also increased over the past day, jumping from 26 to 39, indicating that investors are turning slightly bullish.
Regardless, Bitcoin has struggled to break away from the current range between $62,000 and $57,500, but why?
Bitcoin price stuck between liquidation clusters
The bulls expects to turn $60K into support, but since Aug. 8, BTC has chopped around this level without confirming a trend direction in the short term.
One particular reason for such relatively flat price action is the presence of liquidation clusters.
As observed in the chart, the liquidation levels above $60,000 and below $58,000 were extremely dense over the past week, potentially dictating the sideways movement. However, many of these clusters have been tagged, as $40 million was liquidated over the past day.
Moving forward, the immediate liquidation cluster is currently between $61,500 and $62,500, and over $300 million will be liquidated once the price breaches this range.
If BTC cannot hold above $60,000, this could lead to another bearish blowout, opening the possibility of another cluster range re-test at $58,500, i.e., $180 million in liquidation.
Retail investor Bitcoin demand remains low
One key aspect that dictates a sustainable bullish rally is the presence of retail investors. Data suggests that Bitcoin has witnessed a gradual decline in retail investors’s demand since May 2024.
Moreover, the trading volume for trades less than $10K has been largely underwhelming since May 21.
Funding rate remains close to neutral
Bitcoin’s lack of price action since Aug. 8 was coupled with minimum futures and perpetual trading activity. The Bitcoin open-interest weighted funding rate is currently at 0.0037%, which can be considered neutral.
Data from Coinglass indicates that the funding rate has been close to 0% over the past week. A neutral funding rate means neither long nor short traders hold a major position.
Additionally, Bitcoin historically averages only 1.98% returns in August, making it one of the least volatile months over the past decade.
These factors have contributed to Bitcoin’s sideways price action over the past 14 days. Bitcoin is currently priced at $61,228, registering $36.5 billion in trading volume over the past 24 hours.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
