Analysts warn that caution is needed as Bitcoin whales guide BTC’s price to around $25,000. Bitcoin, February 20 took another day to process $25,000 as analysts continued to warn of market manipulation.
According to Cointelegraph, Data from shows that, at the time of writing, BTC/USD has recovered losses near the weekly close and is again approaching the $25,000 mark.
However, the bulls are still unable to spark a resistance-support reversal, and whale activity on exchanges makes people highly suspicious. In its latest update, the Monitoring Resource Material indicator showed a large number of traders artificially “weaking” above resistance, making BTC/USD more likely to move higher.
Co-founder Keith Alan cites bidding liquidity barriers to prop up spot prices, which he calls “the notorious B.I.D.”
“Multiple rejections at $25,000 correlate perfectly with BTC macro TA, a valid reason to TP at these levels, but the infamous B.I.D. is still trying to push prices higher,” one tweet said. Material Indicators added, “From a TA perspective this should be a local top, but Notorious B.I.D. is still running the binance order book.”
“They are distributing BTC ask liquidity from the $25,000 to $25,500 range into active trading zones, so resistance is easing,” some of the comments also read.
One potential plan of such traders could be to trigger a massive price increase, causing retail investors to flood in or go long, and then get bogged down as whales allocate BTC to the market at higher prices.
Meanwhile, with U.S. markets closed for a holiday, one analyst turned to the longer-term impact of China's move. In addition to potentially allowing retail investors in Hong Kong to use previously banned cryptocurrencies, China’s central bank injected a record $92 billion in liquidity into the economy on Feb. 17.
“While most analysts focus on how Fed tightening will reprice risk assets this cycle, they fail to take into account the magnitude of easing in the East,” the popular Twitter account Tedtalksmacro said in a thread.
It explained that unlike the U.S., where the Fed pulled liquidity through quantitative tightening (QT), China did the exact opposite. In 2020, risky assets, including cryptocurrencies, experienced an 18-month-long bull run under the Federal Reserve’s COVID-19 quantitative easing (QE). “Cryptocurrency is not tied to any particular economy or entity, but rather a liquidity junkie — it craves risk-hungry investors for cash and betting on the fastest horses. That’s exactly what’s going to happen in China this year thing," the post continued.
As Cointelegraph reported, U.S. liquidity has become a major talking point for crypto asset performance, with Arthur Hayes, the former CEO of derivatives giant BitMEX, predicting that the downward trend will continue in the second half of 2023.
“Of course, not all the cash injected by the PBOC [People’s Bank of China] will end up in risky assets. But I bet a fair amount of it will!” Still, the Tedtalksmacro ended.
