Bitcoin (BTC) has climbed to over $106,000 early on Monday following a tumultuous weekend of trading that caused leveraged traders to reevaluate their positions, with market analysts observing liquidity indicators closely.

This spike signifies the third substantial move within a mere 48 hours, spurred by renewed speculation regarding U.S. President Donald Trump’s proposed $2,000 “tariff dividends” and new on-chain metrics that hint at rising short-term volatility.

Increased Volatility Signals Testing of Liquidity

Analysis from Binance reveals that Bitcoin’s 7-day realized volatility (RV-7d) has surged to 0.410, markedly exceeding the 30-day measure of 0.360. This disparity indicates that the market is likely undergoing a liquidity testing period, with abrupt price adjustments reflecting immediate trader repositioning without altering the overall market trend.

Arab Chain suggests this setup is common when short-term traders seize momentum, creating drastic intraday fluctuations while medium- to long-term investors stay put, patiently awaiting confirmations on market direction. Essentially, Bitcoin’s recent price oscillations are primarily influenced by speculative trades in derivatives and leveraged positions, rather than significant changes in underlying demand.

Additional data from Binance indicates that this phenomenon typically precedes substantial market shifts. Should the RV-7d persist in escalating while the RV-30d stabilizes, the market might soon experience price pressures, necessitating BTC to either breach upper resistance thresholds or retreat to newly identified demand zones.

Arab Chain’s report also highlights that volatility spikes often occur when traders react strongly to news and economic indicators, which could amplify market responses in either direction. In this scenario, key signals included Trump’s proposed $2,000 tariff per person, reigniting discussions about a liquidity surge reminiscent of the 2020 stimulus package.

Market Dynamics Influenced by Policy and Trader Reactions

President Trump’s remarks have ignited the latest rally of Bitcoin, with analysts projecting that his initiative could inject approximately $600 billion into the U.S. economy.

With Bitcoin trading above $106,000, it has risen over 4% in the preceding 24 hours, although it still shows a slight decline of about 1% for the week and a larger drop of over 8% over the past two weeks, indicating the pressure following its record high earlier this October.

As noted by Arab Chain, should the RV-7d continue its upward trajectory without a similar increase in the RV-30d, Bitcoin could soon face another pivotal moment. Whether this results in a decisive breakthrough above $108,000 or a fallback toward $100,000 will hinge on the liquidity generated by the next influx of speculative and institutional investment.