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

Bitcoin (BTC) briefly touched $43,000 previous to Wall Street opening on Jan. 6 as new market evaluation supplied unhealthy information for bears. 

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

“Very just like $30,000”

Data from Cointelegraph Markets Pro and TradingView adopted BTC/USD as it ranged after hitting its lowest ranges in practically six weeks.

Amid six-month lows for sentiment and a sense of foreboding on social media, evaluation investigating dealer habits nonetheless concluded that each one just isn’t as unhealthy as it appears.

In a series of posts on the day, common Twitter account Byzantine General argued that for all of the draw back, sellers are virtually exhausted.

“This is beginning to really feel similar to the 30k vary now,” he summarized.

“The imbalance between bid & ask aspect is getting loopy. Spot bids preserve getting crammed with new orders exhibiting up, in the meantime ask aspect fails to repopulate in any significant capability.”

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 only a matter of order book cues.

“Live, die, repeat”

November’s $69,000 all-time highs noticed the start of promoting from long-term holders, that is widespread with each bullish cycle prime.

Related: Bitcoin month-to-month RSI lowest since September 2020 in contemporary ‘oversold’ sign

The short-lived nature of the “prime” in 2021, nevertheless, has left many assuming that the actual cycle peak has certainly not but arrived.

For the meantime, nevertheless, the similarities to summer time’s $30,000 flooring have been simple for market individuals on the day.

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