The current BTC price boost may not be a natural phenomenon any longer, new research says. 2212 Total views 15 Total shares Listen to article 0:00 Market Update Own this piece of history
Collect this article as an NFT Bitcoin (BTC) hit new two-month highs overnight into Jan. 19 as suspicions over the markets validity gained momentum.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewConcern over BTC liquidity exploit
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it consolidated above $21,000 after hitting $21,455 on Bitstamp.
That marked the pairs highest point yet in 2023, the latest accomplishment in a bullish recovery unchallenged since the FTX debacle.
Amid widespread mistrust of the move, however, fresh warnings arose as Bitcoin continued to defy predictions of a major retracement.
Analyzing order book composition for BTC/USD on the largest exchange Binance, Material Indicators expressed surprise that those bidding Bitcoin higher had not yet pulled support.
Been expecting the block of bids placed Fri the 13th to rug, but it’s attracted over 2x the amount of bid liquidity into the range, which is short-term bullish, it commented. IMO, this move seems choreographed. Not fighting it, but limiting exposure to manage risk.BTC/USD order book data (Binance). Source: Material Indicators/ Twitter
As Cointelegraph reported, whales were already in the spotlight after mass buying ensued last week.
They are trying to attract more bids to exploit the thin upside liquidity, Material Indicators added. We could debate 100 different strategic reasons why, but the net effect of big increases in bid liquidity is the same, at least until we retest the local lows and they start rugging support.
Fellow trader Byzantine General noted similarly unusual order book composition at derivatives platform Deribit, with support between $20,000 and $21,000.Bitcoin perpetual swaps order book data (Deribit). Source: Byzantine General/ Twitter
Deribits book looks interesting. Its not often so skewed to one side, it argued.Bitcoin supply may struggle to find buyer
Doubts over the rallys staying power meanwhile extended beyond exchanges.
Related:Bitcoin price breakout or bull trap? 5K Twitter users weigh in
In a blog post published on the analytics platform CryptoQuant on Jan. 16, contributor Phi Deltalytics flagged potential insufficient demand.
The reason, it said, was due to BTC moving back to exchanges for sale, while stablecoin supplies dwindled.
Recent BTC rally has led to market participants depositing their BTC from cold storage to spot exchanges for profit taking, commentary stated.”Such increase in selling pressure along with decreasing reserve of stablecoin for purchase will likely lead to a short-lived recovery rally. More demand is needed for the rally to be sustainable.”Bitcoin vs. stablecoin reserves annotated chart. Source: CryptoQuant
The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. #Bitcoin #Bitcoin Price #Markets #Stablecoin Related News How to store Bitcoin on MetaMask How crypto tokens (but not Bitcoin) will outperform stocks in 2023 Arcas CIO explains Bitcoin price blasts past $21K as 3-day short liquidations near $300M Bitcoin fails to convince that bottom is in with $12K still likely 5 altcoins that could breakout if Bitcoin price stays bullish
