Bitcoin (BTC) has broken below crucial support levels, triggering a significant increase in 'buy the dip' discussions across social media platforms. Despite this retail optimism, on-chain liquidity analysis indicates potential for further downside movement toward $107,000.
The leading cryptocurrency declined over 3% this week to $111,590, falling below both the 50-day and 100-day simple moving averages (SMA). These key technical indicators have flattened for the first time since April, signaling weakening bullish momentum and suggesting caution for traders.
Data from analytics platform Santiment reveals that mentions of "buy the dip" have reached their highest frequency in nearly a month, reflecting strong bullish sentiment among retail investors. Santiment's social trends indicator monitors keyword volume across major platforms including Reddit, Telegram, and X (formerly Twitter).
Historically, Santiment considers such sentiment spikes as contrarian indicators, suggesting that Bitcoin's current price correction may extend further before recovery.
"Market prices often move contrary to crowd expectations. When retail traders aggressively call for buying at $112,200, additional downward pressure typically follows. The optimal entry point usually emerges when optimism fades and investors begin selling at losses," Santiment noted in their latest market analysis.
Major Liquidity Concentration at $107,000
Order book analysis from Hyblock Capital identifies $107,000 as the most significant liquidity cluster, where substantial buy and sell orders accumulate. This concentration can function as a price magnet, potentially drawing BTC downward to test this level.
Liquidity clusters represent areas with high order density in cryptocurrency order books, indicating price levels where significant trading activity may occur. These zones typically absorb market pressure and provide price stabilization.
Hyblock's data also shows developing liquidity pools at $109,000 and $111,000, though these remain secondary to the primary $107,000 level that market makers are closely monitoring.