Bitcoin’s (BTC) bullish momentum is “fading” as liquidity shifts precede volatility, a new analysis warns.
in a X posts On Sept. 6, Keith Alan, co-founder of monitoring resource Material Indicators, pointed out a new change on Binance’s order book.
Analyst: Bitcoin Bulls and Bears Are Lacking ‘Real Strength’
Bitcoin’s price has remained in a tight range since the weekend, but exchange data suggests that may be about to change.
Posting a snapshot of the BTC/USD order book on Binance, Allen sounded the alarm about what he called a “worrying” change in liquidity.
Buying support on the day fell to around $24,600, a price level not seen in the spot market since March.
“The most concerning thing here is that the maximum concentration of bitcoin bid liquidity is now below the lower lows of the previously set range bottom,” said part of the accompanying commentary.
Data from Cointelegraph Markets Pro and TradingView confirmed that BTC/USD hit its lowest since March in mid-June, hitting $24,750 before reversing higher.
Allen went on to say that he expects a similar rebound from current spot levels before any downside moves.
“From a macro perspective, I do expect prices to eventually crash, so the idea of printing new LLs is not a surprise, but I do expect to see a stronger short-term rally before then,” he wrote.
That said, the bears have yet to fully gain the upper hand.
“At this stage, I don’t see any real strength building on either side, and in fact, in my view, this move is not indicative of strong bearish momentum, but bullish momentum and sentiment seems to be fading,” he concluded.
“Anyway, I don’t believe that the people who bought the wall are going to sit there and get filled.”
Allen previously emphasized that $24,750 is the floor for bulls to hold in order to protect the broader Bitcoin price uptrend.
Bitcoin ‘Another big move is brewing’
Elsewhere, popular trader Skew also believes volatility should return soon, noting activity in derivatives markets.
Turbulent start to the week
There is a lot of overtrading in the derivatives market
Slight increase in Perp liquidity
Spot liquidity is getting thinner
Potential to see toxic order flow today (especially in terms of bids)
Everything points to another big move in the making bitcoin dollar
— Skew Δ (@52kskew) September 5, 2023
Related: Bitcoin Price Indicator Replicates Last Move Before FTX Crash -25%
Trader Credible Crypto, known for its relatively bullish outlook on BTC prices, is also looking to limit losses to the high $24,000 range.
“Local low on major liquid/spot exchanges at 25.2k,” he Tell X Subscribers of the day along with explanatory charts.
“Would like to see these lows while still holding the higher timeframe lows of 24.8k (which is more important) before reversing back up to fill the inefficient supply above us (red).”
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.