The bitcoin price currently knows no end in sight and keeps on steaming upwards. At the time of writing, we are trading at $21,153, putting the price up 22.40 per cent from seven days ago. However, not everyone trusts the upward momentum bitcoin is currently showing.
Orchestrated rise
There are traders who feel that the rises are partly staged. Indeed, Material Indicators notes that somewhat strange things are happening with Binance‘s order books at the moment. For this reason, it chooses to manage its risks well at least.
Been expecting the block of bids placed Fri the 13th to rug, but it's attracted over 2x the amount of bid liquidity into the range, which is short term bullish. IMO, this move seems choreographed. Not fighting it, but limiting exposure to manage risk. #FireCharts #RiskManagement pic.twitter.com/epjW0wBT24
— Material Indicators (@MI_Algos) January 17, 2023
There were bids placed in Binance’s order books on Friday 13 January that are highly unusual in terms of size, according to Material Indicators. Particularly for this reason, he is somewhat cautious about bitcoin’s current price increases, but says he is certainly not fighting it.
“It is possible that with these bids in the order book, they are trying to attract additional bids to exploit the thin liquidity upwards,” Material Indicators says. By this he means that with thin order books, it is fairly easy for the big boys within the market to drive up the price.
Deribit's book looks interesting.
It's not often so skewed to one side. pic.twitter.com/5hjLMW09Ha
— Byzantine General (@ByzGeneral) January 17, 2023
Interestingly, Byzantine General says the same thing about Deribit’s order books, where he says something similar is going on. So let’s definitely not cheer too early about these price hikes for bitcoin, because it could all turn around very soon.
Insufficient demand?
Another concern from some traders is that there is simply not enough demand for bitcoin at the moment. By this, of course, they mean that there is insufficient demand to support the current rally, not necessarily insufficient demand in the general sense of the word.
Phi Deltalytics writes about this concern in a blog post for CryptoQuant on 16 January. This analyst notices that a lot of bitcoin is currently moving towards the exchanges, while the number of stablecoins there is decreasing. In general, this is not a good combination.
When bitcoin goes to the exchanges, it is generally to sell, while stablecoins are there to get in. With a drop in stablecoins and a rise in bitcoin at the major exchanges, we are seeing the exact opposite of what is needed to further support this rally.
All in all, then, it is not at all certain that this rally will continue and there are several traders questioning the positive price action. On the other hand, you also have to remember that there are always some negative arguments to be made for the price in the short term.
