Bitcoin’s price has been stuck in a tight range, struggling to gain momentum despite a recent recovery. On August 21, Bitcoin (BTC) saw a 3.62% price increase, closing the day above the 200-day EMA for the first time since August 13. However, it faces stiff resistance around the $60,000-$62,000 range, with no clear breakout in sight.
Bitcoin’s Battle with Liquidation Clusters
One of the key factors contributing to Bitcoin’s stagnant price action is the presence of liquidation clusters. These clusters, located above $60,000 and below $58,000, have acted as barriers, preventing the price from making significant moves in either direction. Over the past week, $40 million in liquidations have occurred, yet Bitcoin remains confined within this range.
Bitcoin liquidation heat map. Source: Coinglass
Currently, the most critical liquidation cluster lies between $61,500 and $62,500, with over $300 million at risk if Bitcoin breaches this range. Failure to hold above $60,000 could lead to another bearish pullback, potentially pushing Bitcoin down to the $58,500 level, triggering $180 million in further liquidations.
Declining Retail Investor Demand
Another major obstacle to Bitcoin’s upward momentum is the decline in retail investor demand. Data shows a gradual decrease in retail activity since May 2024, particularly for trades under $10,000. This lack of interest from smaller investors has made it difficult for Bitcoin to sustain any significant rallies.
Bitcoin Retail Investor demand 30D change. Source: Cryptoquant
Neutral Funding Rates and Low Volatility
Adding to the sideways price action is the lack of significant futures and perpetual trading activity. Bitcoin’s open-interest weighted funding rate currently sits at a neutral 0.0037%, indicating that neither long nor short traders hold a dominant position. This neutral stance has kept Bitcoin’s price relatively stable.
Bitcoin OI-Weight Funding Rate chart. Source: Coinglass
Historically, August has been a quiet month for Bitcoin, with an average return of just 1.98%. These factors combined have kept Bitcoin stuck in a tight range, with the current price hovering around $61,228 and a trading volume of $36.5 billion in the past 24 hours.
