Bitcoin has once again taken center stage, displaying market sentiments that keep traders and analysts on their toes. A prominent market analyst has recently dissected the Bitcoin market, providing a comprehensive thread on BTC market data that points to a landscape ripe with strategic positioning by market participants.
Spot Market Activity Signals Shift In Liquidity
The Binance Spot order book has recently cleared a quoted range from a liquidity perspective, indicative of robust spot buying the previous day. However, a notable observation by Skew points out the current lack of spot volume. This absence may be a breather following the high volume but also underscores the market’s cautious stance after a flurry of buying.
With a very thick bid depth and a high short float, it is no surprise that a short squeeze was triggered, aligning with the spot buying trend. Skew draws attention to the “flip in the orderbook towards ask depth,” suggesting higher ask liquidity. This flip indicates that any upward push in the market will likely need to be driven by spot purchases, with declines also dependent on spot activity.
Diving deeper, Skew analyzes the Binance & Bybit Open Interest (OI) and Delta, finding that open interest has been inching higher post-short squeeze. The gap between OI and Perpetual Delta, along with Perpetual Cumulative Volume Delta (CVD), reveals that long positions are more likely to be filled on price dips than shorts to chase the highs. This behavior suggests a market that is cautiously bullish, willing to bet on long-term gains while still hedging for potential downturns.
For Bitcoin to climb higher, Skew highlights the necessity of an influx in spot-taker bids. Interestingly, the funding rates have not surged, implying that the market is far from being “frothy.” In market parlance, “froth” represents an unsustainable rapid pace of price increases accompanied by high trade volumes. The current funding rates, coupled with the OI’s recovery status post-squeeze, suggest a market that is yet to enter a phase of exuberance.
BTC’s Manipulative Behaviors Suspected
The Bitcoin market is currently witnessing a change in sentiments, with the influence of a major whale becoming more impactful than that of the average traders. While overall market activity remains subdued, there is a noticeable rise in Open Interest (OI)—a tally of unsettled contracts like options and futures still in play. This growing OI amidst a slow market points to large limit orders moving prices rather than a collective of individual trading actions.
As a result, the BTC market exhibits signs that may be indicative of a typical bear or bull trap, suggesting that positions are being cornered and potentially preyed upon for profit by a manipulative entity.
Investors have been observed engaging in buying at lower prices during market dips, commonly known as “takers puking,” and executing limit sell orders during market upswings, or “taker bids.” This represents the market’s tug of war, where takers (participants who go with the current market prices) are compelled to transact within the thresholds set by the manipulators, revealing the presence of a dominant market force.
Furthermore, instead of pursuing the uptrend, spot market takers are cautiously bidding on price declines. On the other hand, sellers in perpetual markets are exerting downward pressure on prices. This contrast in market behavior hints at deliberate attempts at market manipulation. If support in the spot market declines, there is growing worry about the possibility of market dominance by key players taking advantage of frail limit orders from the rest of the market. Over the last 24 hours, Bitcoin price witnessed a short-liquidation of over $15 million.Â
