A new analysis shows that Bitcoin’s “buying liquidity” has dried up. This indicates that Bitcoin (BTC) is likely to face a larger decline. Here are the details…
Bitcoin markets lack volatility
In their latest social media posts, on-chain analytics resource Material Indicators made several comments. He pointed out that the interest in maintaining the current BTC price range is waning. Volatility in Bitcoin markets is still largely absent. Meanwhile, analysts are watching closely what could happen at this week’s annual close. The closing price of BTC/USD on December 31 will also mark the end of the weekly and quarterly candles. Any sudden volatility could turn 2022 into a nightmarish bear market year, experts say.
cryptocoin.com As we have also reported, the pair has dropped nearly 60 percent year-to-date. It also lost 76 percent to its all-time high in November 2021. Various analysts have warned that this may still not be enough to limit the bear market. Now, the order book data seems to highlight the potential for new losses.
In the chart of BTC/USD order book activity on Binance, Material Indicators states, “There is nothing in liquidity that indicates sentiment for a good price level. There does not seem to be much sensitivity about the bottom of this price level,” he commented.
Relationship between whale interest and BTC price
Another post on December 27 argued that “there is not much to be excited about” given the current order book volumes. These also show that large volume traders reduce risk. “Declining whale interest has a lot to do with the lack of volatility in Bitcoin,” research firm Santiment said. Another chart highlighted what Santiment said was a “correlation” between large transactions of $1 million or more and overall BTC price strength. These transactions are currently at their lowest level since December 2020. The following statements were included in the analysis:
If prices continue to drop and there is an increase, this would historically be a bullish signal.
“Lower BTC prices to come”
Meanwhile, trading firm QCP Capital delivered more bad news for cryptocurrency holders in its year-end summary and forecast. Analysts say that both Bitcoin and Ethereum have “5th Phases” to start 2023. believes that it will start the “wave fall”. They think that this will happen in parallel with the resurgence of risk assets, the US dollar and bonds.
“We continue to expect massive rallies in BTC to meet significant selling pressure,” they wrote, describing Bitcoin as “co-trading” with ETH. They pointed to an additional correlation of ARK Invest’s own, centered on ARK Innovation (ARKK) exchange-traded fund. Alongside a comparative chart, QCP states, “ARKK price action is 2 months ahead of BTC. This warns of the future of lower BTC prices,” he said.
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