Bitcoin price bounces off $42K as order book imbalance turns ‘crazy’

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”

November’s
$69,000
all-time
highs
saw
the
beginning
of
selling
from
long-term
holders,
this
is
common
with
every
bullish
cycle
top.



Related: Bitcoin
monthly
RSI
lowest
since
September
2020
in
fresh
‘oversold’
signal

The
short-lived
nature
of
the
“top”
in
2021,
however,
has
left
many
assuming
that
the
real
cycle
peak
has
indeed
not
yet
arrived.

For
the
meantime,
however,
the
similarities
to
summer’s
$30,000
floor
were
undeniable
for
market
participants
on
the
day.

“Uncanny
how
BTC
is
in
a
Jun-Jul
deja
vu.
Live,
die,
repeat,”
statistician
Willy
Woo

tweeted
.

read original article here