Bitcoin

Bitcoin Braces for ‘Capitulation’ Amid Liquidity Concerns and Potential Drop Below $50K

In a recent update shared on X (formerly Twitter) on Oct. 10, analyst Cole Garner predicted that a significant “capitulation” may be on the horizon for the Bitcoin market.

BTC price “range lows” still in play

While Bitcoin stands to benefit from global liquidity trends in the long run, traders may be in for a surprise before the bullish trend fully takes over.

Garner, analyzing onchain activity, pointed out that short-term liquidity is tightening, which could negatively impact BTC’s price performance.

“Liquidity onchain is tightening: I smell capitulation incoming,” he noted.

He described it as “a common pre-requisite to a full bull market.”

One of the charts Garner shared illustrated the Liquid Vision index, which tracks global central bank liquidity.

“Liquidity onchain begins at the central banks. Liquid Vision is my lens, and it’s primed for a buy signal,” Garner explained. He further added: “If China doesn’t trigger it, the Fed or Japan should step in. But we might see more downside first.”

This analysis referenced recent monetary policy adjustments from China’s central bank and the U.S. Federal Reserve. While China introduced significant economic stimulus last month, risk asset traders were disappointed this week when it refrained from adding further stimulus.

Additionally, Garner pointed out the dwindling supply of stablecoins like Tether (USDT) and USD Coin (USDC), the two largest USD-backed stablecoins by market cap.

“Range lows before $100k? Total facepalm,” he remarked, although he emphasized the bullish structure: “We have a higher high. Even at range lows, in the midst of peak fear, the bullish market structure remains intact.”

Despite this, charts showed that range lows could still bring BTC’s price below $50,000.

Bitcoin extends “Uptober” suspense

Some traders continue to hold out hope that BTC/USD might break out of its current sideways movement before the end of October.

One prevailing theory suggests that China’s stimulus changes could fuel a fresh wave of capital into the crypto market.

Zooming out, many bullish predictions remain in place. Veteran trader Peter Brandt recently reaffirmed his belief that BTC/USD could hit $135,000 within the next year—assuming key support levels are maintained.

At the time of writing, Bitcoin was trading close to $61,000, down approximately 4% for the month, according to data from TradingView.