Central Banks Push Bitcoin To Breaking Point As Liquidity Floods Markets

(MENAFN- The Rio Times) Bitcoin hovers near $111,768 this Monday morning, caught between record-high global liquidity and stubborn technical resistance.

The world's largest cryptocurrency faces a critical decision point as central bank money printing reaches extreme levels while trading patterns signal an imminent breakout.

The story behind today's price action reveals deeper market forces at work. Central banks worldwide continue pumping money into financial systems, pushing the Global Liquidity Index to dangerous territory near 100 on technical charts.

This flood of easy money typically drives investors toward Bitcoin and other risk assets. Yet the cryptocurrency struggles to break through the $112,800 ceiling that has capped gains for weeks.

Bitcoin's current position tells a tale of two markets. The digital asset maintains support above all major trend indicators, sitting comfortably above its 200-day moving average at $108,000.



This technical strength suggests underlying demand remains solid despite recent sideways movement. However, declining trading volume reveals reduced conviction among buyers and sellers alike.

The Relative Strength Index reads 46.06, placing Bitcoin in neutral territory where neither bulls nor bears control price direction. This balanced state often precedes significant moves in either direction.

Meanwhile, the Moving Average Convergence Divergence indicator shows slight divergence, hinting that momentum may be weakening even as prices hold steady.

Market structure analysis reveals Bitcoin trapped within an ascending price channel since May 2025. The cryptocurrency now tests the upper boundary of this channel near $112,800.

Breaking above this level would signal continuation of the long-term upward trend. Failure to break through could trigger a pullback toward the channel's midpoint around $110,000.

The broader context involves unprecedented monetary expansion by global central banks. Easy money policies designed to support economic growth create excess liquidity that flows into alternative investments like Bitcoin.

The Global Liquidity Index approaching 100 indicates these policies have reached extreme levels. Historically, such readings often coincide with market peaks as excessive liquidity creates unsustainable asset bubbles.

Support levels provide insight into potential downside risks. Primary support sits at $110,400, a level that proved reliable during September's market turbulence.

Secondary support emerges at $108,500, aligning with mathematical retracement levels. These zones represent critical tests of Bitcoin's technical strength should selling pressure increase.

Volume patterns reveal market indecision as trading activity falls below recent averages. Lower volume during consolidation periods typically indicates investors await catalyst events to drive the next major move.

Federal Reserve policy decisions and economic data releases could provide the spark needed to break current trading ranges. The underlying tension reflects a fundamental question about monetary policy sustainability.

Central banks walk a tightrope between supporting economic growth and avoiding asset bubbles. Bitcoin serves as a barometer for this balance, rising when easy money flows and falling when tightening begins.

Current extreme liquidity readings suggest this balance may soon shift. Fibonacci analysis confirms key support and resistance zones align with mathematical market relationships.

These levels gain significance when multiple technical factors converge, as they do at current Bitcoin price levels. The convergence suggests major institutions and algorithmic trading systems focus attention on these same price points.

Bollinger Bands show volatility compression around current prices, typically preceding significant expansions in either direction. Bitcoin trades near the upper band, indicating potential short-term overbought conditions.

This technical setup combined with extreme global liquidity creates conditions ripe for a decisive move. The market awaits resolution of this standoff between unlimited money printing and natural market resistance levels.

Bitcoin's next move will likely signal broader trends for risk assets as investors navigate the new reality of permanent monetary expansion versus traditional market cycles.

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