Wednesday, April 17, 2024: Bitcoin price stands at $62,832, BTC traders are closely monitoring the cryptocurrency’s price action, with bid liquidity indicating potential upside movement. Currently, the ticker sits around $62K, with bids aligning closer to the $60,000 mark on April 17, as per data from CoinGlass.
Liquidity Dynamics and Trader Sentiment
This week, Bitcoin experienced the liquidation of a significant portion of long positions, resulting in a snap retracement that flushed out hundreds of millions of dollars in positions. However, bulls are yet to regain control, leaving BTC/USD hovering around $63,000, while still posing a risk of further downside.
The latest order book data reveals bids attempting to get filled just below the current spot price, a tactic often employed to lure the market lower. This activity is viewed as cathartic by Keith Alan, co-founder of trading resource Material Indicators, who suggests that such movements historically precede a move into overhead resistance.
“What we want to see ultimately before we get a move that can have a better chance of breaking through this up here is more bid liquidity — something more akin to what we have seen historically,” Alan commented on an order book chart in a video analysis uploaded to X on April 16.
Bids and Trader Sentiment Analysis
CoinGlass data indicates that the most significant concentrations of bids over the past 24 hours are at $61,200, $62,200, and $62,800, reflecting trader interest at these price levels.
Meanwhile, trader sentiment has shifted to negative funding rates for the first time since October 2023. This contrasts sharply with recent weeks, particularly around March’s all-time highs, where funding rates favored bullish sentiment, with shorts paying longs.
Popular trader Daan Crypto Trades observed, “Looking at the funding rate heatmap from the past 6 months, you can see how March was generally very overheated compared to the rest… We just had such a flush.”
Market Analysis and Cooling Environment
DecenTrader, a trading suite, noted that the negative funding period, although brief, signals an overall cooling in the derivatives trading environment. While funding rates have returned to positive territory, the shift suggests a reduction in exuberance among derivatives traders. DecenTrader concluded in its own X thread on the day. Funding rates are back positive again but it was a sign that derivatives trading exuberance is calming down.
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