Bitcoin Liquidity Wars Persist But Bulls Aim For $140K

Key takeaways:

• Bitcoin’s sideways trading results from Binance taker volume turning negative, and the US and Korean BTC premium index showing weak spot demand.

• BTC holding above $115,000 and strong buyer absorption near this level shows bulls are committed to pushing Bitcoin price to new highs.

Bitcoin (BTC) has struggled to maintain momentum after hitting a new all-time high of $123,100 last Monday, and this stalled price action appears to be driven by retail-driven sell pressure, particularly on Binance.

According to CryptoQuant, Bitcoin’s Net Taker Volume again turned negative, dropping below $60 million. This metric indicates that market takers executing trades are predominantly selling. The negative readings underscore growing bearish sentiment among retail participants, even with Bitcoin hovering near record levels.

Regional demand trends further support this caution. In the US, the Coinbase Premium Index, which measures the price gap between Coinbase and other global exchanges, has remained flat for most of July. Despite Bitcoin’s rally, US spot buyers appear hesitant, either taking profits or sitting out in anticipation of better entry points. Meanwhile, the Korea Premium Index has slipped into negative territory, a sign that Bitcoin is now trading at a discount on Korean exchanges. This divergence signals ongoing selling pressure and a broader lack of enthusiasm among Korea-based retail traders.

Related: Bitcoin seller exhaustion ‘likely’ as trader eyes $115K BTC price dip

Bulls hold as Bitcoin remains in liquidity battle

While the above data shows bearish sentiment, Bitcoin holding above $110,000 to $115,000 is encouraging. Crypto analyst Boris Vest noted that this ongoing liquidity battle, where sellers are absorbed near $116,000 and buyers are capped near $120,000, shows a healthy two-sided market. 

Despite aggressive sell pressure on Binance, the recent negative $4.1 billion cumulative volume delta (CVD) was immediately absorbed, followed by a $2.3 billion positive spike as buyers stepped in. This indicates that demand remains resilient at lower levels. As long as Bitcoin continues to defend the mid-$110,000 region, bulls maintain structural control, with the upside potential if sell-side liquidity thins out. The longer this tight range holds, the more likely it sets the stage for a breakout favoring the prevailing uptrend.

From a technical perspective, while a breakout above $120,000 remains possible, a sweep of the daily fair value gap (FVG) between $115,200 and $112,000 could provide the necessary liquidity to fuel the next leg higher. A move into this zone would likely trigger liquidations and set the stage for a strong rally past the current all-time high of $123,100, primarily as price inefficiencies above have largely been filled. 

Bitcoin must show a sharp bullish reaction upon retesting the FVG for this scenario to play out. A failure to rebound quickly after taking out the recent equal lows near $115,700 could signal fading momentum and expose downside risk. In short, the strength and speed of the bounce from this liquidity zone will be key in determining whether BTC is primed for continuation or a deeper retracement.

Bitcoin Researcher Axel Adler Jr. said BTC remains in the growth zone, as “market participants still support buying activity.” Adler Jr added,

“We haven’t yet entered a phase of excessive optimism there’s still room for further upside toward $139 K without a serious risk of overheating.”

Related: New Bitcoin analysis says ‘most explosive phase’ to $140K is close

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.