The first driver behind the ongoing bearish trend highlighted by Arab Chain is the Liquidity Inventory Ratio Collapse. Since mid-July, the liquidity ratio, which is measured by the number of months of liquidity available for sale on platforms, has started to decline rapidly and reached previously unprecedented levels of just over three months.
Given the sharp decline in the quantity of Bitcoin currently available for purchase, this signal points to a supply crisis. Typically, when this occurs in healthy markets, it triggers a price increase due to scarcity. However, the exact opposite has occurred.
Despite the fact that accumulation is usually positive, these addresses’ sluggish and restricted movement was unable to provide meaningful assistance during a market weakness. This is because there was latent demand, but it was not active or timed with the drop, fading market resilience.
