Key Takeaways:
- Bitcoin’s price experienced a significant downturn, yet data reveals an increase in allocation size among spot market buyers.
- Analysis of liquidation heatmaps suggests the potential for further price declines, possibly reaching $107,000.
On Thursday, Bitcoin (BTC) saw its value dip to $108,865, marking a two-week low. Despite some buyers showing interest at these lower price points, selling pressure during Asian trading sessions has consistently eroded the gains made during U.S. trading session rebounds.
Throughout the week, traders have been active in buying intraday dips. However, data from Hyblock’s liquidation heatmap indicates a cluster of liquidations involving leveraged long positions that could be triggered in the $111,000 to $107,000 range.
Besides the risk of downward liquidations, the perpetual futures market continues to significantly influence Bitcoin’s daily price movements. Substantial selling activity originating from larger, institution-sized investors (holding between 1,000 and 10 million units) is currently outweighing the purchasing volume observed among smaller, retail-sized investors (holding between 100 and 1,000 units).
Even as Bitcoin approached $110,000, a notable development emerged: the overall spot order book’s bid-ask ratio shifted back in favor of buyers. This metric reflects the balance between buy orders (bids) and sell orders (asks). The ratio fluctuates between -1 and 1, with zero indicating an equal number of buy and sell orders.
According to Hyblock:
“A bid/ask ratio above 0 suggests a higher number of buy orders compared to sell orders, potentially indicating stronger demand for the asset at the current price.”
See Also: Bitcoin Price Poised to Retest $110K Level as US Dollar Gains Ground
Focusing on spot exchanges with a 10% market depth, data shows buyers entering the market as the price declined from $111,200 to $110,553. This increased buying activity is also evident in the anchored 4-hour cumulative volume delta, showing a surge in buy volume (marked with yellow arrows).
While the spot volumes are dwarfed by the trading activity in perpetual futures, the return of a bullish bid-ask ratio is noteworthy. This marks the first such occurrence since the period between September 5th and 7th, just before Bitcoin rallied from $107,500 to its recent peak of $118,200.
This article is for informational purposes only and should not be considered financial advice. Investing and trading involve risk, and readers are encouraged to conduct their own independent research before making any investment decisions.