BloFin: Bitcoin price faces high downside risk due to current market liquidity levels

cryptocurrency exchange BloFin has warned that the price of Bitcoin is facing high downside risks due to the current market liquidity levels. The platform predicts that the liquidity levels in the cryptocurrency market will remain low in the foreseeable future as investors increasingly favor risk-free assets.

BloFin stated that this is due to the Federal Reserve's decision to withdraw some liquidity from the market during the sale of government bonds, thereby pushing up yields. As a result, the value of safe-haven assets such as gold, silver, and the US dollar index (DXY) has risen sharply due to increased investor demand. BloFin warns that Bitcoin continues to face high downside risks, especially if unexpected events occur. The company notes that the impact of market makers on price stability is weakening, and the Bitcoin price faces significant resistance at the $63,000 level, with a lack of significant support below this price target.

BloFin analysts stated that global central bank demand for gold is also constantly increasing, and the price of gold remains high due to demand. In contrast, the price trend of risk assets is now more influenced by hedging behavior. Therefore, the low liquidity levels of high-risk assets such as Bitcoin have a negative impact on their price trends.

BloFin analysts summarize that despite a slight increase in the butterfly index, investors should still remain cautious about potential systemic market risks.