Bitcoin (BTC) briefly touched $43,000 prior to Wall Street opening on Jan. 6 as new market analysis offered bad news for bears.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
“Very similar to $30,000”
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it ranged after hitting its lowest levels in nearly six weeks.
Amid six-month lows for sentiment and a feeling of foreboding on social media, analysis investigating trader behavior nonetheless concluded that all is not as bad as it seems.
In a series of posts on the day, popular Twitter account Byzantine General argued that for all the downside, sellers are practically exhausted.
“This is starting to feel very similar to the 30k range now,” he summarized.
“The imbalance between bid & ask side is getting crazy. Spot bids keep getting filled with new orders showing up, meanwhile ask side fails to repopulate in any meaningful capacity.”
Bitcoin order books involve both “active” and “passive” flows, and it is the former trading live spot that naturally sets the trajectory at a given time.
Overnight, as BTC/USD lost almost 10% in hours, bears gradually lost momentum, and at current levels are hopelessly fighting active buyer interest.
“At this point it’s a waiting game… Because price is sitting on top of a thick bid side and the active (sell) flow has given up,” Byzantine General continued.
Looking ahead, the status quo cannot last, as those buyers will want to move the market by shifting their bids higher. This, the theory goes, should spark a snowball effect to “slice through the book like it’s butter.”
“This is the feeling I got at the 30k range and I’m getting it again,” he added.
“Maybe there’s a little less buying juice left in the tank than before, but I still think this range is probably accumulation and not re-distribution.”BTC/USD 1-day candle chart (Bitstamp) showing summer consolidation period. Source: TradingView
Responding, fellow trader Pentoshi, who has adopted a conspicuously cool perspective on Bitcoin’s cycle future since November, warned that it was not just a matter of order book cues.
“Live, die, repeat”