Key takeaways:
Retail traders are actively purchasing BTC during price dips in both spot and futures markets, yet larger investors’ net selling is hindering a significant price recovery.
The likelihood of another liquidation cascade down to $105,000 appears reduced, but investor sentiment does not align with the trends reflected in various cumulative volume data cohorts.
Bitcoin (BTC) and Ether (ETH) are making attempts to regain the price levels each cryptocurrency lost during the steep sell-off that occurred from Saturday to Monday. Bitcoin’s price has increased by just 2.4% from its low of $108,665, while ETH has shown better performance, rising 8.26% to a daily high of $4,663 from its low of $4,310 on Monday.
Data reveals a mix of traders capitalizing on the dip, yet BTC’s price remains trapped in a downward trend. The anchored cumulative volume delta (aggregated) for retail traders (1K to 10K) indicates these investors have been net buying throughout the correction from Sunday to Wednesday.
In contrast, whale and institutional traders (1 million to 10 million) were net sellers in the same period; however, as the chart illustrates, the strength of their selling has diminished as BTC’s price moved back into the $111,000 zone.
A closer examination of CVD data shows retail traders in Binance’s Bitcoin spot and perpetual futures markets have been opening long positions throughout the dip, while whale and institutional investors have remained net sellers.
Retail activity in the Coinbase Bitcoin spot market has also been notable, with volumes totaling $101.253 million in net buying, whereas institutional investors on Coinbase and Binance have sold off approximately $7.5 billion in perpetual markets during the depicted timeframe.
The conclusion is that whales exert significant selling pressure across the market, while retail and mid-sized traders are trying to provide price support, believing they are acquiring Bitcoin at a bargain or expecting a swift return to the $117,000 to $118,000 range. Nonetheless, Bitcoin continues to struggle in a short-term downtrend despite positive smaller-order CVD at Binance and Coinbase.
Related: BlackRock Bitcoin ETF holdings surpass Coinbase, Binance; ETH might be next
$120,000 or $105,000, which arrives first?
Liquidation heatmap data from Hyblock indicates Bitcoin is absorbing bids in the $111,000 to $110,000 range during the sell-off over the weekend, with another cluster noted close to $104,000.
While a decline to the lowest liquidity cluster seems improbable, the ongoing circumstances of larger order selling significantly exceeding retail buying continue to exert pressure on BTC’s price.
Traders anticipating a period of consolidation should closely monitor the anchored aggregated daily CVD to determine if this selling pressure eases and if such a change in volume corresponds with shifts in investor sentiment.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
