Bitcoin traders have dismissed BTC’s 2-week highs amid the latest drop in liquidity.
Bitcoin (BTC) touched two-week highs on January 30 as traders warned of thin order book liquidity.
Analysis: Bitcoin has support nearby.
Data from Cointelegraph Markets Pro and TradingView showed BTC price gains on Bitstamp to $43,853.
Following the Wall Street open, continued consolidation is set to take place at $43,500 at the time of writing.
Bitcoin has capitalized on a change in strategy since the weekend, now rising above $5,000, off two-month lows previously seen.
As Cointelegraph reports, the update has significantly reduced outflows from Greyscale Bitcoin Trust (GBTC), one of the newly launched Bitcoin Exchange Traded Funds (ETFs).
But now the bulls are facing strong resistance at $43,800 as the weekly low.
#BTC
We have it there
Bitcoin revisited the major resistance of the ~$43800 region.
At this point, Bitcoin is making a new low from the candle-rich high of early January, which was made in yesterday's newspaper #Crypto #Bitcoin pic.twitter.com/jRwV6G684m
— Rekt Capital (@rektcapital) January 30, 2024
Prominent trader and analyst Rect Capital at X (formerly Twitter) posted the day in part, “Strengthening to lose the weekly bearish divergence (almost played on last week's dip).
Prominent trader Skew warned that a large buyer penalty of $48,000 was still needed in January.
“Price has got very thick bid depth here, which will impact additional supply costs, which will impact receivership flow and require $48K+ buying at a higher price to check,” he told X Subscriber.
“Tenders are very thin on the order book so far with the exception of $42k and $40k, with bid depth below $38k.”
Continuing on the liquidity issue, material indicators of trading inputs indicated that the absence of bids directly below the spot price – could pave the way for a collapse.
“Much of the action since Friday has been choreographed in anticipation of Wednesday's Fed announcement and the close of BTC's monthly candle,” X Analytics said.
“With our declining bids below, don't be surprised if we see this move backfire.”
Material indicators cited the US Federal Reserve's decision on benchmark interest rate changes on 31 January.
Pay attention to Fed's Powell for BTC price change
Keith Allan, founder of Material Indicators, suggested that the week's landscape could provide a perfect storm for crypto volatility.
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While he was “not expecting” a surprise at the rate meeting, he said in a video update on the day, the Fed's comments on the economy combined with the lack of liquidity can give Bitcoin traders a headache.
All eyes were on Fed Chairman Jerome Powell's speech and press conference.
“The Telegraph can tell that things are changing a bit and maybe the Fed won't cut as fast as the market expects – and that obviously creates some opportunity for some volatility,” he commented.
GM
Here's another quick #BTC analysis video for ya. #Bitcoin managed to clear some strong technical resistance on the daily chart, but #FireCharts shows that the bidding liquid is slowing.
While the upward trend is likely to continue, Wednesday's #FED rate hike decision and… pic.twitter.com/NYDjS5qw9K
— Keith Allan (@KAProductions) January 30, 2024
According to data from CME Group's FedWatch Tool, the odds of a rate cut at the Fed's meeting since March were less than 40 percent at the time of writing.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
