Bitcoin has broken below the $105,000 level, deepening market fears as selling pressure accelerates across the crypto landscape. The sharp move lower comes at a time when confidence is wavering, volatility is rising, and traders are bracing for possible further downside. Yet beneath the surface, a key on-chain indicator suggests that a critical liquidity shift may be approaching — one that has historically preceded major rebounds.
According to data from CryptoQuant, the Stablecoin Supply Ratio (SSR) has now fallen back into the same low zone seen just before Bitcoin’s earlier recovery this year, hovering around the 13–14 range. This indicator measures the ratio between Bitcoin’s market capitalization and the total market cap of stablecoins, offering insight into the amount of “dry powder” available on the sidelines.
When SSR declines, it typically signals that stablecoin liquidity — potential buying power — is increasing relative to Bitcoin’s valuation. Historically, this zone has often acted as a turning point, where capital quietly builds before re-entering risk assets.
SSR Signals Hidden Liquidity — But With a Cycle-End Twist
According to CryptoQuant analyst Woominkyu, the behavior of the Stablecoin Supply Ratio (SSR) offers critical insight into Bitcoin’s current position in the market cycle. When SSR drops, stablecoin liquidity — effectively the dormant “buying power” sitting on the sidelines — rises. This dynamic often precedes market recovery phases, as capital quietly prepares to rotate into Bitcoin.
Conversely, when SSR climbs, it typically reflects liquidity being deployed already, aligning with overheated markets and distribution periods.
Right now, SSR is retesting its yearly lows while Bitcoin trades near $104,000 and attempts to consolidate. This alignment has historically marked powerful turning points, suggesting that fresh capital could be preparing to re-enter. In previous cycles, similar setups preceded relief rallies and, in some cases, explosive upside continuation. That makes the current environment particularly intriguing, even as bearish sentiment dominates and fear spreads across the market.
However, Woominkyu highlights a key nuance that traders cannot ignore: each SSR rebound zone in recent cycles has shown diminishing strength. In other words, while liquidity is accumulating, the magnitude of these signals appears to be weakening. This could mean that crypto’s liquidity engine — once driven heavily by rapid stablecoin expansion and speculative inflows — is slowing.
If this interpretation holds, Bitcoin may still see a recovery rally from current levels, potentially even one final push toward euphoric highs. But it also suggests the possibility that the market is gradually transitioning into a new phase — one defined less by aggressive liquidity cycles and more by maturing capital flows, institutional participation, and slower reflexive momentum.
Bitcoin Slides Toward Key Support as Momentum Weakens
Bitcoin’s price action continues to deteriorate as market volatility rises, with BTC now trading around $104,000 after breaking below the $105,000 level. On the 8-hour chart, the structure remains fragile, and the series of lower highs and lower lows highlights persistent bearish momentum. Attempts to reclaim the $110,000 region earlier in the week were rejected near the cluster of moving averages, reinforcing that sellers currently control the market.
The highlighted consolidation zones around $109,000–$111,000 and $106,000–$108,000 have flipped into resistance, providing a visual map of where supply continues to overwhelm demand. Now, price is approaching a critical demand zone near $102,000–$103,000. This area has historically attracted dip buyers, but if it fails, Bitcoin may be exposed to a deeper retrace toward psychological support closer to $100,000.
Volume has noticeably increased on recent red candles, suggesting panic-driven selling and forced liquidations rather than calm distribution. Meanwhile, moving averages are starting to roll over, and the 50-EMA has turned sharply lower, signaling momentum loss.
Bulls need to defend this current support region to avoid further downside acceleration. Until Bitcoin reclaims at least the $108,000–$110,000 zone, the market bias leans bearish, and traders should expect volatility and caution as price compresses near these key levels.
Featured image from ChatGPT, chart from TradingView.com
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