These two liquidity pools are critical for determining where Bitcoin trends next ๐จ This article is 5 years old...
These two liquidity pools are critical for determining where Bitcoin trends next
2 min read
Updated: Mar. 6, 2020 at 6:45 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The cryptocurrency market has been firmly range-bound for the past couple of days, which has been rooted in Bitcoinโs inability to garner any direction in the time following its recent break below $9,000.
As the benchmark cryptocurrency continues hovering around $8,700, analysts are now keeping their eyes on a few levels that are key for determining the state of its 2020 uptrend.
One prominent trader is now noting that there are two liquidity regions that he is closely watching, with its reaction to these regions potentially offering valuable insight into the future of the recent 2020 uptrend.
Bitcoin consolidates at $8,700 as bulls and bears reach an impasse
Although Bitcoin and the aggregated crypto market remained in an unrelenting uptrend throughout all of January and most of February, it now appears that buyers and sellers have grown deadlocked.
This is elucidated while looking at the cryptocurrencyโs bout of sideways trading within the upper-$8,000 region, as it has struggled to break above the strong resistance that exists below $9,000 but is being bolstered by the significant buying pressure that sits at roughly $8,400.
In the near-term, in order for Bitcoin to begin its next notable trend, it must first break above either the upper or lower boundary of this trading range. Until then, most analysts are staying neutral on BTC.
George, a popular trader on Twitter, is one such analyst that is currently neutral on BTC, telling his followers that he is staying sidelined until the crypto is able to post a clean break of one of its rangeโs boundaries.
โBTC: Something like this. If we don’t get the sweep and just dump through, I’ll get stopped and stay flat until we get a clean break below the WO, or a break back above mid-range. Let’s see.โ
Here are BTCโs two key liquidity pools to watch for
The upper and lower boundaries of this aforementioned trading range also seem to correlate closely to the two key liquidity regions that analysts are currently watching.
SalsaTekila, a highly respected cryptocurrency trader, spoke about the importance of these levels in a recent tweet, explaining that he isnโt willing to enter any swing trades until he sees how Bitcoin reacts to one of these levels.
โI got my eyes on those liquidity pools: 1) $8,969 double top. 2) $8,200 swing low. Not willing to swing trade BTC until one or the other hits.โ
The coming few hours and days will hopefully give investors insight into Bitcoinโs mid-term trend based on its reaction to these levels.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.