Bitcoin Has Reclaimed the $85,500 Level After a Strong Move to the Upside

Bitcoin has reclaimed the $85,500 level after a strong move to the upside, reigniting hopes for a push toward the psychological $90,000 mark.

Bitcoin price rose on Monday, kicking off the new week of trading with a move back above the $85,500 level. The recent strength in BTC sparked hopes of a push toward the psychological $90,000 mark, although broader financial market uncertainty continues to loom large.

Despite the crypto market’s relative resilience throughout the recent stock market downturn and the threat of an escalating trade war, investors remain cautious.

Bitcoin Liquidity Remains Strong Despite Slowdown

Recent reports in the crypto sphere have claimed that Bitcoin liquidity is sharply dropping as capital flows into the market are slowing. However, on-chain data from CryptoQuant suggests otherwise.

The slowdown in Bitcoin’s Realized Capitalization growth—currently at +0.6% per month—indicates a reduction in new capital entering the market. But it doesn’t necessarily signal a decrease in liquidity.

According to CryptoQuant’s data, Bitcoin’s Realized Capitalization continues to grow at a slow and steady pace. The eight-week MA of Realized Capitalization stands at around $866 billion, showcasing a slow but persistent inflow of capital.

This growth is now decelerating, which might lead some to infer that liquidity is declining. However, such a conclusion would be premature and incomplete.

While the rate of new capital entering Bitcoin is slowing down, it’s not yet signaling a liquidity breakdown. The market is cooling down from the frantic buildup seen in late 2023 and early 2024.

Bitcoin Price Testing Crucial Supply

Bitcoin is currently trading at $88,200 after days of speculation surrounding a potential recovery rally. While the recent upward movement has injected optimism into the market, bulls still face a critical test.

To confirm a new uptrend and signal the start of a fresh bull phase, Bitcoin must reclaim and hold above the $90,000 level—a key psychological and technical resistance.

This level has acted as a strong barrier in recent weeks, and a decisive breakout could encourage more capital inflows and shift sentiment in favor of buyers. However, the risk of rejection remains high.

If BTC fails to break above $90K and close convincingly above both the 200-day moving average (MA) and the 200-day exponential moving average (EMA), then we could see a swift return of bearish pressure.

A failure to maintain momentum at this stage could trigger a pullback below the $84,000 level, where short-term support is expected to be tested.

Bitcoin is approaching a crucial juncture as it stalls at a key resistance zone. The cryptocurrency faces an immediate resistance at the 200-day MA and the 200-day EMA, both located around $89,800. A breakout above this level could propel Bitcoin toward the next resistance at $90,000.

Moreover, if the bears manage to sink Bitcoin below the $84,000 support, it could open the door for further declines. In the broader market, stock futures are indicating a muted open on Monday, signaling that the recent rally might be losing steam.

As the market navigates this critical juncture, market participants will be closely watching price action and macroeconomic signals. For now, bullish hopes are alive—but investor caution shows no signs of fading.