Bitcoin Struggles to Break $43k: High Liquidity and Market Dynamics Keep Bulls in Check
Summary:
Bitcoin's price struggle to breach the $43,000 mark continues this week, maintaining a narrow trading range. High liquidity near the spot price hampers Bitcoin bulls, keeping the cryptocurrency between $41,500 and $44,000. Hefty seller interest emerged after Bitcoin slipped below $44,000, with strong buyer support found near $42,500. There is no immediate candidate that could disrupt the market in the short term. Analyst Philip Swift suggests that Bitcoin's current cooldown isn't surprising given the frothy levels of the Value Days Destroyed Multiple.
This week, Bitcoin's price is yet to surpass the $43,000 mark, even as big-time investors show interest in the market. The cryptocurrency's price hasn't seen significant movement, remaining in a tight range for a week now. Last week, as the first spot exchange-traded funds in the United States came into play, Bitcoin's value fell abruptly by 15%, much to the disappointment of investors. Despite this, the lack of downward influence hasn't given Bitcoin an upward push to reach even the higher margins of its overall trading range, set at a max of $48,000.
A critical issue flagged by trading tool Material Indicators is the high liquidity near the spot price. The service explained on X platform (formerly Twitter) that the reason Bitcoin's price has remained sandwiched between $41,500 and $44,000 since last Saturday is precisely this liquidity issue. It also demonstrated this trend by presenting a heatmap showing the order book liquidity of BTC/USDT on Binance, the world's largest crypto exchange. The data disclosed mighty buyer support at and around $42,500, with resistance growing stronger above $43,500.
As Bitcoin's price slipped below $44,000, hefty seller interest surfaced at the $45,000 mark and lower, the heatmap further revealed. Material Indicators concluded that there are no immediate prime movers that could disrupt the market dynamics.
Meanwhile, various theories have been suggested to explain why Bitcoin's price hasn't soared following the ETF launch. In a related post on X, Philip Swift, the founder of the statistical tool Look Into Bitcoin, indicated that the Coin Days Destroyed metric multiplied by the current Bitcoin price, known as Value Days Destroyed, might provide insight. Swift suggests that the Bitcoin price goes through a cooldown when this metric crosses 1.5.
As reported by Cointelegraph, this metric had previously indicated that Bitcoin was in its early bull market stages as of July last year. This article does not offer financial advice or recommendations. All financial trades and investments carry risks, and readers need to do their thorough research before making any decisions.
Published At
1/18/2024 7:36:45 PM
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