Bitcoin hits new post-FTX high as analysis warns move ‘choreographed’
2 min read
Bitcoin (BTC) hit new two-month highs overnight into Jan. 19 as suspicions over the market’s validity gained momentum.
Concern 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 pair’s 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.”
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.
“Deribit’s book looks interesting. It’s not often so skewed to one side,” it argued.
Bitcoin supply may struggle to find buyer
Doubts over the rally’s 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.”
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
