Bitcoin (BTC) remains below $43,000 this week, with even institutional purchases having little impact on the market.
Liquidity constrains Bitcoin bulls
Cointelegraph Markets Pro and TradingView It has been confirmed that the price trend of BTC has been concentrated in a narrow range for 7 consecutive days.
Bitcoin has been overwhelming traders since falling 15% in two days after the launch of the first U.S. spot exchange-traded fund (ETF) last week.
While no further downside has occurred so far, the bulls similarly lack the momentum to push BTC/USD back to the upper end of a broad trading range capped at $48,000.
However, when considering what hurdles stand in the way, trading resource material indicators showed signs of a key issue: too much liquidity around the spot price.
“Liquidity dampens volatility” Said On January 18th, X (formerly Twitter) subscribers repeated a classic mantra:
“That is exactly why Bitcoin has been trading sideways since Saturday, with the price pegged between $41,500 and $44,000.”
Material Indicators presents a liquidity heatmap of the BTC/USDT order book on Binance, the world's largest exchange, showing ambiguity in bid support between $42,000 and spot around $42,500. Ta.
“The weekly view of Binance’s order book shows another $10M+ BTC bid above $42,000, while resistance above $43,500 is strengthening.”
The heatmap further confirms that since Bitcoin fell below $44,000, significant seller interest has appeared both there and above $45,000.
Material Indicators concluded that there are no clear candidates to shake up the market in the short term.
Analyst: “No wonder” BTC price falls from high
Meanwhile, other theories continue to emerge as to why Bitcoin does not respond to ETF launches with snap gains.
Related: Did the $5 billion Bitcoin whale sale trigger the post-ETF BTC price crash?
his own ×post On this day, Philip Swift, creator of the statistical resource Look Into Bitcoin, flagged a classic signal on the Value Days Destroyed (VDD) Multiple indicator.
VDD multiplies the existing Coin Days Destroyed indicator by the current BTC price to compare spending velocity over time, and anything above 1.5 typically marks a local top, Swift explained.
“The Value Days Destroy Multiple reached frothy levels early in this cycle,” he wrote alongside a printout of the indicator.
“It’s no surprise that the price of Bitcoin needs to come down.”
As reported by Cointelegraph, VDD suggested that Bitcoin was in an early stage bull market last July.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.
