The current Bitcoin price boost might not be a natural phenomenon anymore, according to new research. Bitcoin (BTC) hit new 2-month highs overnight into January 17 as suspicions over the market’s validity gained momentum.
There has been concern over the Bitcoin liquidity ‘exploit’.
Data acquired from TradingView followed BTC/USD as it consolidated above $21,000 after rising to $21,455 on Bitstamp. This marked the pair’s highest point yet in 2023, the latest accomplishment in a bullish recovery unchallenged since the FTX exchange saga.
Amid the growing mistrust of the move, nonetheless, new warnings came up as Bitcoin continued to defy projections of a massive retracement. Analyzing order book composition for Bitcoin on the biggest exchange Binance, Material Indicators showed surprise that those bidding Bitcoin higher did not yet pull support.
It commented:
“Been expecting the block of bids placed Fri the 13th to the rug, but it’s attracted over 2x the amount of bid liquidity into the range, which is short-term bullish.”
“IMO, this move seems choreographed. Not fighting it, but limiting exposure to managing risk.”
As reported previously, whales were already in the spotlight after mass buying came up in the past week.
Material Indicators added:
“They are trying to attract more bids to exploit the thin upside liquidity. 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 also noted some unusual order book composition at the Deribit derivatives platform, with support formed between $20,000 and $21,000.
It argued:
Buy Bitcoin Now“Deribit’s book looks interesting. It’s not often so skewed to one side.”
Bitcoin Supply Might Struggle To Find Buyer
Doubts over the rally’s staying power in the meantime extended beyond exchanges.
In a blog post published on the CryptoQuant analytics platform on January 16, contributor Phi Deltalytics flagged possible insufficient demand.
The reason, it stated, was due to Bitcoin moving back to exchanges for sale, while stablecoin supplies dwindled.
Commentary said:
“Recent BTC rally has led to market participants depositing their BTC from cold storage to spot exchanges for profit taking.”
“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.”
