Bitcoin Bounce Failed Again: Why?

Takeaways from the conference:

• Retail traders have been aggressively purchasing BTC dips on the futures and spot markets. However, net selling by larger orders is hindering a strong price recovery.

• Investor sentiment does not match the trends seen by various cumulative volume cohorts.

BitcoinBTCEtherETHThe price of each cryptocurrency is being recovered from the steep drop seen between Saturday and Monday. Bitcoin is only up 2.4% from its $108 665 low. ETH, on the other hand, has risen 8.26%, to a new daily high of $4,663 after its $4,310 low.

The BTC market is stuck in a downward trend despite the fact that data indicates a wide range of traders purchasing dips. The aggregated anchored volume delta of the retail trader cohort (1K to 10,000) indicates that these entities were net buyers throughout the entire correction, from Sunday through Wednesday. 

In the same period of time, whales and large institutional investors (1,000,000 to 10,000,000) had been net sellers, but, as shown in the graph, this intensity has waned as BTC’s price returned to the $111,000 area. 

Retail traders opened net long positions in Binance’s Bitcoin spot markets and permanent futures, while institutional traders and whales were net sellers.

The Coinbase Bitcoin Spot Market has also seen retail traders active with volumes of $101.253 in net purchases. Institutional investors at Coinbase, Binance and other exchanges have been net sellers, with the perps market unloading approximately $7.5 billion during the period depicted. 

Takeaway: Whales continue to dominate selling pressure on the entire market while retailers and mid-size participants try to maintain the current price. Retailers and midsize players seem to be betting that either they will buy Bitcoin at a reduced valuation, or see a rapid mean reversion of $117,000 – $118,000 as the range. Bitcoin is still in a downtrend, despite the positive CVD of smaller orders at Binance, and Coinbase. 

Related: BlackRock Bitcoin ETF holdings overtake Coinbase, Binance; ETH may be next

Which comes first, $120,000 or $100,000?

Hyblock data on liquidation shows Bitcoin absorbs bids around $111,000-$110,000 in the area of the weekend’s sell-off. A second cluster is located near $104,000.

The current trend of large orders outweighing smaller retail sales continues to pressure the BTC price. 

Investors who hope for a period consolidation will want to closely observe the daily aggregated CVD. This is where they can see whether this pressure on sellers has eased and if a volume change aligns itself with changing sentiment. 

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.