Bitcoin (BTC) spent another day tackling $25,000 on Feb. 20 as analysts continued to warn of market manipulation.
BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView
Bitcoin Gets Boost From “Notorious BID”
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD was able to erase losses from around the weekly close to revisit the $25,000 level at the time of writing.
However, the bulls continued to be unable to trigger a resistance-support flip and whale activity on the exchanges kept suspicions high.
In its most recent update, monitoring resource material indicators revealed that large-volume traders were artificially “thinning out” resistance, making it more likely that BTC/USD would surge higher.
Co-founder Keith Alan referenced a wall of bid liquidity that boosts the spot price, something he called the “Notorious BID.”
“Multiple rejections of $25,000 perfectly correlate with BTC macro TA which is a valid reason for TP at these levels but Notorious BID is still trying to push the price higher,” reads a tweet.
“Based on history and the potential to tear up through illiquidity, I’m still scalping longs.”
material indicators added that “from a TA perspective, this should be a local spike, but Notorious BID still runs the Binance order book.”
“They are dispersing BTC ask liquidity from the $25,000 to $25.5,000 range into the active trading zone, so resistance is fading,” a portion of the comments added.
A possible plan among such traders could be to trigger a large price surge, prompting retail investors to chime in or go long and then get stuck as whales are listing BTC at higher levels.
BTC/USD order book data (Binance). Source: Keith Alan/Twitter
China Could Boost “Liquidity Junkie” Crypto
Meanwhile, with US markets closed for a holiday, one analyst turned to the longer-term implications of moves out of China.
Related: A “Snapshot” on $20,000? 5 things to know in Bitcoin this week
Not only did China’s central bank potentially allow Hong Kong retail investors access to previously banned cryptos, it also pumped a record $92 billion in liquidity into the economy on Feb. 17.
“While most analysts focus on how Fed tightening will reassess risk assets this cycle, they fail to consider the extent of easing in the East,” popular Twitter account Tedtalksmacro argued in a thread.
He explained that unlike the US, where the Fed is withdrawing liquidity through quantitative tightening (QT), China is doing the opposite. In 2020, risk assets, including crypto, enjoyed an eighteen-month bull run amid the Fed’s COVID-19 quantitative easing (QE).
“Crypto is not tied to any particular economy or entity, but is a liquidity junkie – it craves the risk-hungry investor to get cash and back the fastest horse. That’s exactly what’s going to happen in China this year,” the thread continued.
As Cointelegraph reported, U.S. liquidity is already a major talking point when it comes to crypto asset performance, with Arthur Hayes, former CEO of derivatives giant BitMEX, predicting a continuation of the downside in the second half of 2023.
“Of course, not all of the money injected by the PBoC will end up in risky assets. But I’ll bet a decent helping of it will do it!” Tedtalk’s macro completes nonetheless.
“Just as we saw from the west in 2020, central bank liquidity rises = risk asset prices (like BTC) rise.”
Annotated Chart BTC/USD vs US Liquidity. Source: Tedtalksmacro/ Twitter
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