Bitcoin is on the verge of potentially revisiting long-term range lows before the “full bull” market takes over, according to analyst Cole Garner in his latest analysis released on October 10.
Garner warned that “capitulation is incoming” for Bitcoin markets, which could result in a sharp decline before recovery.
While Bitcoin could still benefit from global liquidity trends, Garner believes that an initial shock may surprise many traders.
He pointed out that on-chain liquidity is tightening, which could impact Bitcoin’s price performance.
“Liquidity on-chain is tightening: I smell capitulation incoming,” he summarized, calling it a “common pre-requisite to full bull.”
Accompanying his analysis were charts displaying the Liquid Vision index, which tracks global central bank liquidity.
Garner wrote, “Liquidity onchain starts at its source, the central banks. Liquid Vision is my lens. It’s primed for a buy signal.” He added that if China doesn’t initiate a liquidity boost, the U.S. Federal Reserve or Japan could, though further downside may come first.
Recent policy shifts from China’s central bank and the U.S. Federal Reserve were referenced in the analysis. Last month, China introduced economic stimulus measures, but risk-asset traders were disappointed this week when the country paused further action.
Additionally, Garner highlighted the decreasing supply of stablecoins like Tether (USDT) and USD Coin (USDC), which could also impact market liquidity.
“Range lows before $100k? Total facepalm,” Garner remarked.
However, he remained optimistic, noting, “We have a higher high in place. Bullish market structure. Even at range lows in peak fear – still bullish structure.”
Garner’s analysis suggests that despite possible short-term declines, the long-term outlook for Bitcoin remains positive.
