Bitcoin (BTC) may be heading towards capitulation due to tightening on-chain liquidity, according to a cryptocurrency analyst. However, this capitulation may be followed by a “full bull run”.

Bitcoin fell before rising

In detail thread in X on BTC price analysis, cryptocurrency analyst Cole Garner stated that a capitulation of the leading digital asset may be on the horizon. Garner attributes the potential downturn in the economy to tightening liquidity in the chain.

Tracking global central bank liquidity around the world, the analyst said he sees a “buy signal” for digital assets. However, more downsides to cryptocurrencies may emerge before liquidity measures by central banks correct them.

In his analysis, Garner stated that “if China doesn’t call, the Fed or Japan should,” which likely points to recent economic stimulus injected by China’s central bank to improve the country’s bleak economic prospects.

Garner referred to recent economic stimulus from China’s central bank, but noted that the People’s Bank of China (PBoC) this week refrained from injecting additional liquidity, moderating expectations for risk assets such as cryptocurrencies.

Garner highlighted the low stablecoin supply compared to early October 2024.

Analyzing the “Bitfinex Grail,” essentially the total supply of the exchange’s two leading stablecoins – USDT and USDC – Garner noted that the quarterly rate of change is degenerating, potentially leading to lower prices for digital assets in the brief term.

Despite these concerns, Garner pointed out that Bitcoin has printed a higher high on the 8-hour chart and the market structure remains bullish. Even if BTC drops to lows in the high 40k range. dollars, the overall price action is still considered positive.

Garner suggested that if BTC hits its range of lows, traders and traders may consider buying at that price. Even if they are brief on liquid cash, they must be careful not to get spooked by the market and sell their current holdings in panic.

Another cryptocurrency analyst, Ali, seemed to echo Garner’s view: stating that Bitcoin is stuck in a bearish parallel channel and is at risk of falling to channel lows around $52,000. The analyst emphasized that BTC needs to break the level of $66,000 to go up.

Can Bitcoin hit recent all-time highs in 2024?

For the remainder of 2024, Bitcoin bulls expect interest rate cuts from the US Federal Reserve (Fed) to fuel a recent rally. However, BTC needs to overcome several hurdles to maintain its bullish momentum.

Most recently, cryptocurrency analyst Carl Runefelt excellent that BTC needs to break the $64,000 resistance level to trigger a rally in the fourth quarter of 2024. Failure to break this price level could lead to further declines.

Next, Bitcoin’s price finally turned green in October, giving bulls hope for another “rise” for the asset that was are characterized by a significant price escalate. At press time, BTC is trading at $60,711, down 2.4% in the last 24 hours.