Bitcoin Consolidates: Thin Liquidity Zone Sets Stage for Next Big Shift
- Keyword Financial
- Aug 6
- 4 min read
Introduction
Bitcoin is currently consolidating in a low-liquidity “air gap” between $110,000 and $116,000, following a pullback from its recent all-time high above $123,000. This price range has seen limited trading activity, with many recent buyers now holding positions above $116,000. As a result, the market is waiting for new demand to emerge and establish a firmer base. Recent rebounds from around $112,000 have shown opportunistic buying, but overall, the $110,000–$116,000 band remains light in supply, potentially setting the stage for future accumulation and a possible move higher (CryptoSlate).
Despite the recent rally, Bitcoin has not yet reclaimed the cost basis of short-term holders, with significant resistance near $116,900. A sustained break above this level would indicate renewed demand and could reestablish the uptrend, while failure to do so might lead to a deeper test of previous support levels around $110,000. Market metrics suggest that Bitcoin is in a “warm” but not overheated state, with the majority of short-term holders still in profit, though that percentage has dropped from 100% to 70% during the recent drawdown. This balanced market environment reflects neither strong bullish nor bearish dominance.
Additionally, spot Bitcoin ETFs in the U.S. recently experienced their largest outflow since April, signaling some sell-side pressure, while perpetual funding rates in derivatives have cooled, indicating reduced speculative appetite. Overall, Bitcoin appears locked in this $110,000–$116,000 corridor, with the market awaiting sufficient demand to break above resistance and continue its upward trajectory, or risk a further decline if support fails (BitcoinEthereumNews).
