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Bitcoin has experienced some volatility during today’s trading session as the price of BTC hits critical resistance levels. The number one cryptocurrency by market capitalization reacted positively to macroeconomic factors, but as the weekend approaches, low levels could lead to sudden price movements.
At the time of writing, Bitcoin (BTC) is trading at $19,800 with a gain of 1% in the past 24 hours and a loss of 8% in the past week. The cryptocurrency saw soaring price action after the US released key statistics on its economy, but the rally was short-lived as BTC stumbled below a cluster of sell orders around $20,400.
Data from Material Indicators shows how liquidity in the Binance order books has followed the price of Bitcoin. Major players have put in place buy and sell orders as BTC approaches critical levels.
As can be seen in the chart below, today’s rejection was caused by a pile of approximately $20 million in ask orders as Bitcoin tended to the upside. The price has seen a similar pattern this week, with the price of BTC moving upward only to experience overhead resistance caused by a spike in demand liquidity.
In the opposite direction, buy (bid) orders have remained relatively more stable with $19,500, $19,000 and $18,000 showing the most liquidity. These levels will be critical as they will act as a support and prevent the price of BTC from hitting new annual lows as the market tries to fall.
In that sense, Material Indicators also show increasing sales pressure from major players. Demand orders over $100,000 and $1 million have increased in shorter terms and could be a hurdle to any upside in the near term.
In the US, the weekend is extended to Tuesday due to a public holiday. This often leads to spikes in volatility as low volume affects price action.
What could play in Bitcoin’s favor?
Additional data from analyst Justin Bennett points to a possible rejection of the US dollar as the currency tries to break above a key flat base. This could lead to the recovery of levels last observed in 2003.
However, the currency has failed to clear the area above 109 as measured by the DXY index and there could be a “fake-out” at play. Bitcoin and the crypto market are negatively correlated with the US dollar. Therefore, a rejection could favor the emerging asset class. Bennett said:
So far it seems that the $DXY was “wrong”. Maybe a pullback to 107 next week if this trendline breaks. That would be bullish for crypto in the short term. But in the end I think the USD index will go to 112-113 and probably even higher.