Asia Morning Update: BTC Dips into Low-Liquidity “Air Gap” Amid Ongoing Post-ATH Decline
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Good Morning, Asia. Here's what's making news in the markets:
Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For an in-depth look at U.S. markets, refer to our Hotnchill insights.
Bitcoin (BTC) is holding steady around $115K Thursday morning in Asia, reflecting a 1% increase over the last 24 hours as the post-all-time-high correction continues to unfold amidst low volume and weak conviction.
According to Glassnode, BTC has entered an “air gap,” a low-liquidity zone between $110,000 and $116,000, after retracting from a major supply cluster where short-term holders had previously found support. These areas typically experience minimal trading activity and can either facilitate accumulation or serve as a trapdoor for more significant declines if demand does not return.
“The market is effectively re-finding its footing,” Glassnode analysts noted, describing the range between $110K (the prior ATH) and $116K (recent buyer cost basis) as a new battleground. They observed that while there has been opportunistic buying with 120,000 BTC acquired on the dip, prices have yet to convincingly reclaim significant resistance levels, especially the ~$116.9K threshold marking recent short-term holder entry points.
Short-term holder profitability has decreased from 100% to 70%, which Glassnode characterizes as typical for the mid-phase of a bull market. However, without new inflows, sentiment could erode quickly. ETF flows have turned negative, with a -1.5K BTC outflow earlier this week, the largest since April. Meanwhile, funding rates in the derivatives market have cooled, reflecting reduced leverage and a more cautious stance among speculators.
Market maker Enflux provided a similar perspective: “Crypto markets remain in a fragile holding pattern. Despite some relief in the altcoin space, major coins like BTC and ETH are still struggling to inspire confidence,” it explained in a client note. “The broader trend indicates heavy legs with generally light volume.”
ETH is up 2% in the last 24 hours, trading just below $3,600. Our Hotnchill Crypto Index, which tracks a diverse range of assets, gained 1.69% to 3,815.22.
“Until BTC and ETH regain strength with volume,” Enflux added, “the path of least resistance may continue to trend sideways or downward.” The market's next move likely hinges on whether buyers are willing to step in and establish a base within this low-volume zone, or whether another drop toward $110K is necessary to reset the trend. For now, traders are cautious, and the bulls remain unproven.
Market Movers:
BTC: A potential Bitcoin supply shock, prompted by dwindling OTC desk reserves and consistent corporate accumulation, could influence BTC price movement following a dip below $110K, according to market observers.
ETH: Ethereum may have reached a local top as selling pressure hits $419 million, its second-highest on record. ETH is retesting a major resistance zone near $4,000, which preceded a 66% decline in late 2024, raising the risk of a 25–35% drop by September. Meanwhile, bettors remain divided on Polymarket, with 48% anticipating a rally to $5,000 despite the bearish signals.
Gold: Gold's rally stalled Wednesday as traders took profits amid rising Fed rate cut expectations, U.S. trade tensions, and a potential Fed leadership shakeup. Prices remained flat after a three-day gain driven by economic weakness, with spot gold last trading at $3,372.11, down 0.24% on the day.
Nikkei 225: Asia-Pacific markets opened mixed Thursday, with Japan’s Nikkei 225 flat as investors reacted to new U.S. semiconductor tariff threats.
S&P 500: U.S. stock futures were flat Wednesday night as traders processed Trump’s new semiconductor tariffs, with the S&P 500 still enjoying a 1.7% rise for the week.
Elsewhere in Crypto: Industry leaders applaud the SEC’s approval of liquid staking, paving the way for institutional adoption. Roman Storm has been found guilty of unlicensed money transmitting conspiracy, while Trump Media tests 'Truth Search' using AI technology.
