Key takeaways:
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Retail traders are aggressively buying BTC price dips in spot and futures markets, but net selling from larger order investors is preventing a robust price recovery.
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Risk of another liquidation cascade to $105,000 seems less likely, but investor sentiment is misaligned with the trend seen in assorted cumulative volume data cohorts.
Bitcoin (BTC) and Ether (ETH) are attempting to recover the price ranges that each cryptocurrency lost during the sharp sell-off seen on Saturday through Monday. Bitcoin price is up a mere 2.4% from its $108,665 low, while ETH fared better, rising 8.26% to a daily high at $4,663 from its Monday low at $4,310.
Data shows an assortment of traders buying the dip, yet BTC price remains stuck in a downtrend. The anchored cumulative volume delta (aggregated) for the cohort considered to be retail traders (1K to 10K) shows these entities net buying throughout the correction from Sunday to Wednesday.
Whale and institutional-sized traders (1 million to 10 million) were net sellers in the same time frame, but as the chart shows, the intensity of the selling has subsided as BTC price reclaimed the $111,000 zone.
A more granular look at CVD data shows retail traders in Binance’s Bitcoin spot and perpetual futures markets opening longs throughout the dip, whereas whales and institutional investor-sized traders have been net sellers.
Retail traders in the Coinbase Bitcoin spot market have also been active, with volumes reaching $101.253 million in net buying, while the institutional investor cohort at Coinbase and Binance have been net sellers with perps markets unloading roughly $7.5 billion in the time frame portrayed.
The takeaway is, whales dominate the selling pressure across the market, while retail and mid-size players attempt to provide price support and seem to believe that they are either buying Bitcoin at a discounted valuation or banking on a quick mean reversion back to the $117,000 to $118,000 range. Despite this, Bitcoin continues to languish in a short-term downtrend despite a positive, smaller-order CVD at Binance and Coinbase.
Related: BlackRock Bitcoin ETF holdings overtake Coinbase, Binance; ETH may be next
$120,000 or $105,000, which comes first?
Liquidation heatmap data from Hyblock shows Bitcoin absorbing bids in the $111,000 to $110,000 area during the weekend sell-off, and another cluster exists near $104,000.
While a breakdown to the lowest liquidity cluster seems unlikely, the current dynamic of larger order selling far outweighing the retail cohort continues to put pressure on BTC price.
Traders hoping for a period of consolidation should carefully observe the anchored aggregated daily CVD to see if this sell pressure alleviates and if such a change in volume aligns with shifting sentiment among investors.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
