Bitcoin stuck in the bear market How does liquidity run dry, another fall coming?

[Ben Graham]

Bitcoin’s price structure is showing signs of strain, and new data from CryptoQuant shows that fresh capital is no longer entering the market. Instead of the recent drawdown acting as an attraction for buyers, it appears to be triggering withdrawals.

This change in liquidity behavior is important, as it indicates that Bitcoin may be transitioning into deeper bear market conditions. Notably, on-chain metrics tracking new liquidity flows are revealing negative cumulative inflows over the past month.

Selling Pressure Builds, New Investor Inflows Flip Negative

According to a recent analysis that was done on the CryptoQuant platform, Bitcoin’s 30-day cumulative new investor flow has dropped to approximately $2.6 billion. 

This metric was revealed from CryptoQuant’s ‘Bitcoin New Investor Flow’ data, which is revealing that more capital is leaving the ecosystem than entering it. The data shows that the ongoing dip is failing to attract meaningful participation from new buyers.

Interestingly, the current reading of this metric is displaying a huge contrast between previous bull phases and current conditions. Large spikes in new money, visible in blue in the chart below, accompanied strong price rallies, particularly in 2017, 2021, and again during the 2024-2025 bull market. Those inflow surges coincided with powerful upside momentum in terms of price action.

At present, those spikes are notably absent. Instead, the lower section of the chart is displaying growing red readings due to net capital outflows. The latest print is below zero, which shows that sell-offs are not being absorbed by fresh liquidity.

This dynamic matters because markets rely on marginal buyers to sustain higher prices. When new participants step back, price action becomes vulnerable to deeper pullbacks. That is why there is a need for new buyers to absorb the selloffs.

Low Liquidity Raises Crash Risks

Although liquidity contraction does not automatically guarantee another major crash, it increases fragility of price action. Bitcoin, for one, is still trading below $70,000, although bulls have largely prevented further breakdowns below $60,000. This, in turn, has kept the Bitcoin price trading in a range around $70,000.

However, many crypto analysts are of the notion that Bitcoin could still crash further to lower price levels. Calls for a deeper correction are circulating across trading platforms and social media, with projected bottoms stretching from around $55,000 to as low as $30,000.

The absence of inflow spikes suggests that Bitcoin may struggle to regain momentum in the near term. If liquidity continues to dry up, the probability of another significant leg lower before a rebound increases.

At the time of writing, Bitcoin is changing hands at $67,160, reflecting a modest 0.3% gain over the past 24 hours. This price behavior is unfolding alongside a slowdown in mining activity due to miners shutting down their systems, which led to the largest mining difficulty drop since 2021.