Market veteran Michaël van de Poppe identifies the perfect area to grab Bitcoin liquidity before Donald Trump’s inauguration kickstarts the next rally.

Bitcoin (BTC) has recently experienced a major price decline, retesting the lower end of $90,000. This downturn aligns with market veteran Michaël van de Poppe’s analysis earlier today, suggesting a liquidity grab beneath recent lows before a potential rally.

Bitcoin Enters Liquidity Zone

Van de Poppe sees this “final flush” as a precursor to a bullish phase, coinciding with President Trump’s upcoming inauguration on Jan. 20. The crypto community draws parallels to the post-election surge that began on Nov. 5, following Trump’s victory.

Data from van de Poppe’s chart shows two key areas of interest in green. He labelled the first zone, between $89,000 and $91,000, as “liquidity to grab.” So far, the recent price drop below $91,000 has entered into this liquidity zone.

This indicates a region where stop-loss orders from long positions likely accumulate, making it a potential target for a price sweep before any reversal. 

The second zone is between $84,000 and $86,000. Van de Poppe suggests this as another liquidity pocket and critical support level that could attract significant buying interest if reached.

The chart shows Bitcoin’s bearish trajectory featuring lower highs and lower lows. Price consolidates near $91,000, with several wicks into the upper liquidity zone, signaling attempts to test and grab liquidity. 

Above, resistance levels are at $99,993 and $104,087, indicating potential upside targets once the price recovers. The RSI shows declining momentum and points to oversold conditions. This indicates a possible reversal after weaker hands are flushed out. 

Macroeconomic Factors Influencing Bitcoin’s Price Action

Notably, in an earlier analysis, van de Poppe noted Bitcoin’s ongoing consolidation amid a challenging macroeconomic environment. 

#Bitcoin continues to consolidate, and, as the macro-economic climate isn’t great (constant rally of the Yields and strong Dollar), #Altcoins remain with their suffering in price action.

I’m expecting: red Monday, green end of the week. pic.twitter.com/dgsZCYLp7s

— Michaël van de Poppe (@CryptoMichNL) January 13, 2025

He highlighted the persistent rally in U.S. Treasury yields and a strengthening dollar. He projected a “red Monday” followed by a recovery later in the week, a forecast aligning with the current market trajectory.

Later, van de Poppe observed that U.S. Treasury yields continue to rise, with the 10-year yield approaching 5.00%, currently at 4.80%. This increase persists despite the Federal Reserve implementing 75 basis points rate cuts in 2024. 

The Yields continue to rally, while the FED has done 75bps rate cuts in 2024.

The US Yields are close to reaching a new high at 5.00%, as it’s currently 4.80%.

What to watch?
– Weaker labor markets
– Trump inauguration (buy the rumor, sell the news)
– Weaker economy. pic.twitter.com/cz8PFopOLa

— Michaël van de Poppe (@CryptoMichNL) January 13, 2025

He advised investors to monitor indicators such as weakening labor markets, the potential “buy the rumor, sell the news” effect surrounding Trump’s inauguration, and signs of a slowing economy.

Supporting this perspective, recent data indicates that bond yields across developed countries have surged, impacting stock markets and complicating central banks’ efforts to lower borrowing costs. 

Bitcoin Could Benefit from Fiscal Uncertainty 

The U.S. has been a significant driver of this trend, with factors such as strong employment data and inflationary policies contributing to the bond market selloff. 

Last week, MN Consultancy, founded by van de Poppe, highlighted the looming U.S. debt ceiling crisis, with the deadline approaching on Jan. 14, tomorrow. Treasury Secretary Yellen hints at extreme measures to prevent a default.

U.S. Debt Ceiling Crisis Looms

With the debt ceiling deadline approaching on Jan 14, 2025, uncertainty grows about a potential default. Treasury Secretary Yellen warns of “extraordinary measures.”

Historically, such turmoil boosts #Bitcoin as a hedge against instability. Could…

— MN Consultancy (@MNConsultancy_) January 4, 2025

MN Consultancy confirmed that such fiscal uncertainty has historically positioned Bitcoin as a hedge against instability, possibly signaling the next phase of the bull cycle.

Meanwhile, the recent downturn in Bitcoin’s price, down 3.9% today to $90,927, its lowest this year, has led to massive liquidations. In the past 12 hours, the crypto market has seen $435.58 million liquidated, with $393.7 million representing long positions, according to Coinglass data.