30 January 2024
A notable perspective recently came from the Glassnode co-founders Jan Happel and Yann Allemann, Negentropic on X, who recently shared insights into Bitcoin price dynamics. Notably, the analysts highlighted liquidity as a crucial factor for Bitcoin’s price trajectory.
Bitcoin Market On The Brink Of Spike In Volatility
Negentropic revealed that BTC’s recent ascent above $42,200 has created a significant liquidity pool for long positions, marked by a “neutral impulse” in the market.
This trend indicates that Bitcoin aims to bridge the liquidity gap above the $42,000 mark, which hints at potential volatility and significant market changes.
So far, about $659 million in liquidations have taken place, leading Negentropic to predict that continuing the bullish momentum could trigger liquidations worth $1 billion in short positions.
“Liquidity is KEY.”
1. Bitcoin Analysis: Bitcoin surged to $42.2k, providing liquidity for long positions, with a neutral impulse.
2. Liquidity Gap: The price is moving to fill the liquidity gap above $42k, indicating potential volatility. Approximately $659 million in… pic.twitter.com/wStqXqmLRN
— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) January 29, 2024
This scenario could catalyze a market uplift through a “short squeeze,” a rapid price increase forcing short sellers to exit their positions. Such market movements often result in dramatic shifts, providing a fertile ground for Bitcoin’s growth.
Meanwhile, in a post uploaded last week, Negentropic linked the burgeoning liquidity in the crypto market to China’s efforts to stabilize its markets by injecting substantial liquidity. According to the Glassnode co-founder, this development could serve as a crucial catalyst for crypto like Bitcoin and equity markets as we progress into the first half of 2024.
The Liquidity surge begins.
China will try to prop up its markets by massive liquidity. It is very to be the catalyst that will make crypto and equity markets soar into the first part of 2024 @HenrikZeberg https://t.co/LBXBRh6D35
— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) January 23, 2024
This perspective aligns with the broader market recovery, as Bitcoin shows signs of resurgence following reduced selling pressure, particularly from the Grayscale Bitcoin Trust (GBTC).
Bitcoin trades for $43,166, up 6% in the past week. However, despite this uptick, the asset’s daily trading volume remains subdued, down from $26 billion last Monday to $14 billion today, indicating a cautious market sentiment.
BTC Bullish Signals Strengthen
Amid these market developments, bullish forecasts continue to emerge. Crypto analyst Jelle recently suggested that with Bitcoin reclaiming the $42,000 level, it might be “time to focus on longs once again.”
#Bitcoin made stellar progress over the weekend, reclaiming $42,000 and making it back into the range.
Time to focus on longs once again. Bull market stays on! pic.twitter.com/T7fgmsVIGs
— Jelle (@CryptoJelleNL) January 29, 2024
Echoing this sentiment, Michael van de Poppe, a prominent crypto analyst and pundit, expressed optimism in his latest YouTube video. He argued that the recent price correction in Bitcoin might have reached its conclusion.
Further supporting the bullish sentiment, Ali’s chart analysis reveals an increase in large Bitcoin holders. An additional 46 entities now possess 1,000 BTC or more, a 3% rise in just two weeks.
Even amidst this market correction, #Bitcoin whales are not slowing down – they’re accumulating more $BTC!
In fact, there’s been a notable increase in major players: 46 new entities now hold 1,000 #BTC or more, marking a 3% increase in just two weeks. pic.twitter.com/GVNInKW7A2
— Ali (@ali_charts) January 24, 2024
Featured image from Unsplash, Chart from TradingView