The price of Bitcoin faced a significant rejection as it reached crucial resistance above $27,000, resulting in ongoing selling pressure. Today’s trading session continues to reflect this bearish sentiment. Should buyers fail to defend the current levels, Bitcoin’s price is likely to test critical support. However, data suggests that this action could trigger a potential bounce for the cryptocurrency. At the time of writing, Bitcoin is trading at $26,650, reflecting a 2% loss over the last 24 hours. While Bitcoin has been stuck in sideways price action over the past week, it has underperformed other cryptocurrencies like XRP and TON, which recorded 5% and 25% profits, respectively, in a similar period.
Thin Orderbook Highlighting Vulnerability
An analyst from crypto research firm Material Indicators shared a chart that indicates significant liquidity levels for the BTCUSDT trading pair on Binance. The data reveals that traders on this platform have been consistently selling Bitcoin and moving liquidity below current levels on a monthly basis. The chart itself shows a “thin” orderbook for this trading pair. The analyst emphasizes a “small buy wall” situated around $24,700, which acts as a crucial support line. Defending this level becomes imperative to prevent further downside price action. Although there is limited liquidity around this critical level, if bulls can inject capital, they can potentially safeguard it and initiate a price rally to reclaim lost territory. However, failure to do so may allow bears to push the price further and return it to critical support levels at $23,000 and $22,000. It is noteworthy that the liquidity at these levels is even lower than $25,000, which indicates the possibility of a deeper correction, aptly dubbed “Bearadise” by the analyst.
The Influence of Macroeconomic Forces
Data provided by trading desk QCP Capital emphasizes the significant role played by macroeconomic forces in shaping Bitcoin’s price. Just yesterday, the US Federal Reserve (Fed) surprised the financial markets with a “hawkish” stance, limiting any upward momentum for Bitcoin. This event had a bearish impact on traditional markets, leading to the breaking of key levels in the Nasdaq 100 and rates markets, as stated by QCP Capital. The trading desk suggests that the bearish thesis could potentially extend into the crypto markets, dragging Bitcoin lower as well. However, Bitcoin’s correlation to these macro markets is expected to be lower compared to highly stretched markets like the NASDAQ.
The battle for Bitcoin’s price continues as it faces selling pressure and critical resistance. While there is a potential for a bounce if critical support levels are defended, the current liquidity levels indicate vulnerability. Furthermore, the influence of macroeconomic forces, particularly the Fed’s recent stance, adds another layer of uncertainty for Bitcoin’s price trajectory. Traders and investors need to closely monitor these factors to navigate the volatile cryptocurrency market effectively.