Key Points:
Retail traders are actively buying BTC as prices drop in both the spot and futures markets, but net selling by large order investors is hindering a strong price recovery.
The risk of a cascading liquidation down to $105,000 seems low, but investor sentiment is inconsistent with the trends seen in various cumulative volume data groups.
Bitcoin (BTC) and Ethereum (ETH) are attempting to recover the prices lost during the significant sell-off from last Saturday to Monday. Bitcoin's price has only rebounded 2.4% from a low of $108,665, while Ethereum performed better, rising 8.26% from a low of $4,310 on Monday to a high of $4,663.
Data shows that despite some traders choosing to buy the dip, BTC's price remains trapped in a downward channel. The cumulative volume delta (total) indicates that retail traders holding between 1,000 to 10,000 coins continued to net buy during the adjustment period from Sunday to Wednesday.
During the same period, whales and institutional-level traders (holding between $1 million to $10 million) were net sellers. As shown in the chart, selling intensity has gradually weakened as BTC's price returned to the $111,000 range.
More detailed CVD data shows that retail traders in the Binance Bitcoin spot and perpetual contract markets continued to go long during the downturn, while whales and institutional investors continued to net sell.
Retail traders in the Coinbase Bitcoin spot market were also very active, with a net buying volume of $101 million. Meanwhile, the institutional investor groups on Coinbase and Binance were net sellers, with the perpetual contract market accumulating about $7.5 billion in sell-offs during this period.
Overall, whales dominated the market's selling pressure. Retail and mid-sized players are trying to provide price support, believing they are either buying Bitcoin at a discount or betting that prices will quickly mean-revert to the $117,000 to $118,000 range. Nevertheless, despite positive CVD indicators on Binance and Coinbase, Bitcoin remains in a downward trend in the short term.
Hyblock's liquidation heatmap data shows that during the weekend sell-off, Bitcoin absorbed a large number of buy orders in the $111,000 to $110,000 range, with another dense buy area around $104,000.
While the likelihood of dropping to the lowest liquidity dense area is low, the current selling volume of large orders far exceeds that of retail traders, continuously applying pressure on BTC's price.
Traders hoping for the market to enter a consolidation phase should closely monitor the aggregated daily CVD, actively observing whether selling pressure eases and whether changes in volume align with shifts in investor sentiment.
Related: Metaplanet's board approves a plan to raise $1.2 billion, designating $835 million for purchasing Bitcoin (BTC).
Original: “Bitcoin (BTC) Trend Reversal to $118K or Another Drop to $105K, Which Comes First?”
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