The local bull run seems to be manipulated by whales' game

Key points: 

• BTC/USD has consolidated above $21,000 after reaching $21,455 on Bitstamp.
• Analyzing the order book composition for BTC/USD on the largest exchange Binance, Material Indicators observed that those who wanted to buy Bitcoin had not yet committed to supporting the price.
• Whales are attempting to increase the number of bids in order to take advantage of the limited upside liquidity.
• Recent BTC increase has led to traders depositing their BTC from cold storage to exchanges in order to take a profit, this has led to an increase in BTC deposits to exchanges.
• "Such an increase in selling pressure along with decreasing reserve of stablecoin for purchase will likely lead to a short-lived recovery rally. More demand is needed for the rally to be sustainable," CryptoQuant's analyst stated. 

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Bitcoin reached new two-month highs on Jan. 19th as the validity of the market was questioned.

BTC/USD 1H chart [Bitstamp]. Source - TradingView

BTC liquidity "exploit"

Data from TradingView followed BTC/USD as it consolidated above $21,000 after reaching $21,455 on Bitstamp.

This was their highest point in 2023, the latest achievement in a bullish trend that has been uninterrupted since the FTX debacle.

Despite widespread skepticism, fresh concerns arose as Bitcoin continued to defy expectations of a significant decline.

Analyzing the order book composition for BTC/USD on the largest exchange Binance, Material Indicators observed that those who wanted to buy Bitcoin had not yet committed to supporting the price.

"I had anticipated the block of bids placed on Friday the 13th to carpet, however, the volume of bids has exceeded 2x the amount of bid liquidity into the range, which is short-term bullish," Material Indicators remarked.

“IMO, this move seems choreographed. Not fighting it, but limiting exposure to manage risk.”

BTC/USD order book data [Binance]. Source - Material Indicators [Twitter]

As Btcman reported, whales have already become the subject of discussion.

They're attempting to increase the number of bids in order to take advantage of the limited upside liquidity.

“We could debate 100 different strategic reasons why, but the net effect of big increases in bid liquidity is the same, at least until we retest the local lows and they start rugging support.”

Fellow trader Byzantine General commented on the unusual order book composition at Deribit, with support between $20,000 and $21,000.

Bitcoin perpetual swaps order book data [Deribit]. Source - Byzantine General [Twitter]

“Deribit’s book looks interesting. It’s not often so skewed to one side,” it stated.

The supply of Bitcoin may be difficult to find a buyer for

The rally's longevity was also questioned by other exchanges.

In a blog post published on the analytics platform CryptoQuant on Jan. 16, contributor Phi Deltalytics noted that insufficient demand may be a problem.

The cause was attributed to BTC returning to exchanges for purchase, while stablecoin supplies diminished.

Recent BTC increase has led to traders depositing their BTC from cold storage to exchanges in order to take a profit, this has led to an increase in BTC deposits to exchanges.

"Such increase in selling pressure along with decreasing reserve of stablecoin for purchase will likely lead to a short-lived recovery rally. More demand is needed for the rally to be sustainable."

Bitcoin vs. stablecoin reserves annotated chart. Source - CryptoQuant