Will Bitcoin Drop to 50k on Liquidity Risk Before a Big Rally?
Many traders are predicting that Bitcoin could drop lower to force weak hands to sell before a big rally. Bitcoin could benefit from the global liquidity trend, but what happens before that could shock many traders.
According to Cole Garner, a pro-trader, on-chain liquidity is tightening in the short term and will be reflected in the price path. This is a must-have condition before the market enters a bull run.
According to the Liquid Vision chart, on-chain liquidity originates from central banks. Liquid Vision will send a buy signal. If China does not loosen its monetary policy, then it will be the US or Japan. China announced a significant economic stimulus package last month, while the US is gradually lowering interest rates to promote the flow of money back.
Overall in the short term, we cannot rule out Bitcoin falling to a lower price before a strong breakout. Bitcoin's support levels are 58k / 54k / 50k.
