Recent analytical insights from FireCharts 2.0 reveal significant movements by key stakeholders in Bitcoin (often referred to as “whales”) that are influencing the cryptocurrency’s price movements. These stakeholders are changing liquidity patterns in ways that suggest a strategic push toward more tightly controlled trading horizons.
What are Bitcoin whales doing?
According to Material Indicators, an advanced trading analysis tool, there has been a noticeable adjustment in the distribution of liquidity within the Bitcoin order book. Specifically, at higher price points, sell liquidity decreases and bid liquidity increases from $60,000 to $67,000. These dynamics are set to compress Bitcoin’s price into a narrower range, a scenario expected by the platform after the digital asset rose above $52,000.
Discussions about Bitcoin’s price trajectory are filled with speculation that it could rise to $73,000, especially after rebounding from a low of $52,000. Despite the recent high near $70,600 ending in a sharp rejection, sentiment remains cautiously optimistic. “There has been a lot of talk since late last week calling for a pump to $73,000 and there are good reasons why that is a short-term target and why it is still possible despite the $70,600 rejection we saw on Monday. “He mentioned important indicators.
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From a macroeconomic perspective, Bitcoin’s prospects are very optimistic. “The outlook for Bitcoin is literally more bullish than ever,” a representative from Material Indicators said in a recent livestream. They refrained from repeating specifics and urged viewers to revisit last week’s analysis for a deeper understanding.
In contrast, technical analysis paints a more nuanced picture. Despite the favorable macro outlook, Bitcoin has consistently failed to confirm the resistance/support (R/S) reversal of $69,000, a critical level to confirm bullish momentum. This continued failure is symbolic of the bulls’ struggle to maintain upward pressure and secure a new all-time high (ATH). By integrating order book data with technical indicators, analysts observed a gradual downward movement in the sell liquidity block from the initial placement of $75,000-$76,000 to the most recent around $70,000-$71,500.
The key question going forward is how low Bitcoin can realistically go before it finds real support. To solve this problem, Material Indicators’ analysts utilize a combination of technical analysis and real-time order book data. Bitcoin’s 21-day, 50-day, and 100-day moving averages converging around $65,000-$66,000 provides a strong case for potential support. In particular, the 21-day moving average is preferred due to its historical reliability in terms of both resistance and support.
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Order book data supports this analysis, with sell liquidity resistance strengthening above $70,000, while bid liquidity has strategically moved lower to $58,000. The greatest concentration of bid liquidity shows the strongest support at $60,000 and $65,000, with somewhat lower support around $66,000 and $67,000.
Despite the complex interplay of factors in the short term, the long-term view remains overwhelmingly optimistic. The essential question for the market is not whether a legitimate breakout will occur, but when. Observations from the order book show that the asking amount between $71,000 and $75,000 is over $200 million, juxtaposed with the bid amount between $65,000 and $67,000, which is about $90 million. If ask liquidity does not decrease, bid liquidity would need to strengthen significantly to trigger a sustainable breakout towards the $70 level.
According to Material Indicators, the most favorable scenario is for Bitcoin to establish a firm consolidation range above $65,000, validate an R/S Flip at $69,000, and stabilize above this level before targeting a new ATH. This development will not only confirm the bullish trend but also pave the way for continued upward momentum based on current order book trends and technical analysis. They suggest that this trajectory will provide the healthiest market development given existing conditions.
At press time, BTC was trading at $67,832.
Featured image created with DALL·E, TradingView.com chart