Bitcoin Trapped Between Two Liquidation Zones: Alphractal CEO Warns of Imminent Market Transition

WhaleStalker · 2026-01-19T14:44:31+00:00

On-chain analytics firm Alphractal indicates a critical market dynamic threatening leveraged traders as Bitcoin remains trapped in a narrow range between $90,500 and $84,500. This "liquidity squeeze" may trigger significant liquidations and heightened volatility, with on-chain metrics suggesting a bear market trend.

WhaleStalker

2026-01-19 14:44:31

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On-chain analytics firm Alphractal has flagged a critical market dynamic that could dramatically wipe out leveraged traders in either direction. The CEO highlighted that Bitcoin is currently confined within a narrow trading band defined by two significant liquidation thresholds—$90,500 overhead and $84,500 below—creating what analysts describe as a “liquidity squeeze.”

The Liquidation Trap

According to Alphractal’s assessment, the current price action between these two levels represents an active hunt for trapped liquidity on both sides of the market. The $90,500 zone would trigger mass liquidations of short positions, while a breakdown below $84,500 would wipe out long holders. This binary outcome suggests the market is preparing for a volatile transition, with traders caught in the middle facing heightened risk of sudden price swings in either direction.

Chain Data Points to Caution

Beyond price levels, on-chain metrics paint a more sobering picture. Alphractal’s analysis reveals that Bitcoin transfers are increasingly occurring at minimal profit margins or near break-even levels. The SOPR Trend Signal indicator—which tracks whether Bitcoin transactions are being conducted at a profit or loss—has declined noticeably, a pattern historically observed during bear markets.

This transition in on-chain behavior suggests that early profit-taking phases have concluded, and the market is entering a more uncertain period. Alphractal notes that a genuine market bottom cannot be confirmed until “green signals” return to the SOPR indicator, a process that may require several more months to unfold.

Current Market State

With Bitcoin currently trading near $92,860, the asset remains entrenched within the liquidation zone framework. Market participants are watching closely to see whether the next significant price movement will wipe out the short side at $90,500 or pressure longs toward $84,500, as the ongoing liquidity hunt continues to shape short-term volatility.

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