Bitcoin holds its price steady but needs new buying power to break higher.

Bitcoin experienced significant volatility at the beginning of the week, as severe fluctuations from the end of last week to Monday triggered a large wave of "liquidation" in the derivatives market.

According to data from Glassnode, $28.6 million in Long positions and $25.2 million in Short positions were liquidated within just 24 hours, reflecting a rare cleansing in both directions. This left leveraged traders unable to react in time and indicates a rapid shift in market sentiment.

Liquidation of Long and Short Bitcoin futures contracts | Source: GlassnodeOpen contracts measured in BTC have decreased by about 7%, from 360,000 to 334,000 BTC. This sharp decline indicates that speculative leverage is being temporarily flushed out, so the market may be in a "reset" phase.

Although Bitcoin remains in the price range of $100,000–$110,000, the on-chain activity of BTC is showing signs of cooling down. Profit measurement indicators are weakening and user participation levels remain low, indicating the possibility that the market is entering a consolidation phase.

According to Glassnode, the market seems to be digesting recent gains and waiting for a wave of new demand to drive the next rally.

Technically, Bitcoin's inability to sweep external liquidity around the $109,000 mark has led to a gradual downtrend on the 4-hour chart. The current price action remains confined within a descending channel, with a key observation zone between $103,400 and $104,600.

This area coincides with the fair value gap (FVG) on the daily timeframe and is supported by the 200-day exponential moving average (EMA), increasing the likelihood of a short-term bounce.

Bitcoin 4-hour chart | Source: TradingViewConsidering that BTC is attracting liquidity in the current price range, the breakout scenario from the downtrend channel towards a new high is still feasible. However, until upward momentum returns and on-chain activity recovers, the overall market structure is likely to remain in a state of consolidation.

Bitcoin Faces Pressure as Core Inflation Rises

The lack of motivation for further price increases may mean that the downtrend continues into next week. Although there have been many positive expectations recently surrounding the possibility of the U.S. Federal Reserve (Fed) cutting interest rates, the latest inflation data suggests that the Fed has little reason to change its stance.

The PCE inflation index (Personal consumption expenditure) – the Fed's preferred measure – rose to 2.3%, in line with expectations, while the core PCE index rose to 2.7%, slightly higher than the forecast of 2.6%. This is the first increase since February 2025, reflecting the returning inflationary pressures.

With consumer price increases showing no signs of cooling, the Fed is likely to continue maintaining the current interest rates, keeping financial conditions in a tight state – which is not very favorable for risky assets like Bitcoin.

Data from Glassnode also reinforces this cautious perspective, as spot trading volume only increased slightly by $7.7 billion in Q2. Previously, transfer volume had decreased by 36% at the beginning of the quarter, indicating that speculative sentiment is clearly weakening.

Total Bitcoin transfer volume | Source: GlassnodeĐình Đình