Bitcoin regains $25,000 on hopes that record low easing in China will boost BTC price
Bitcoin (BTC) spent another day tackling $25,000 on February 20 as analysts continued to warn of market manipulation.
Bitcoin Lifted by “Notorious BID”
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD recaptured losses from around the weekly near $25,000 mark again at the time of writing.
However, bulls remained unable to trigger a resistance support and whale activity on exchanges kept suspicions high.
In its latest update, monitoring resource material indicators revealed that high-volume traders were artificially “thinning” resistance costs, making it more likely that BTC/USD would move higher.
Co-founder Keith Alan referenced a wall of bid liquidity that lifts the spot price, something he called the “Notorious BID”
“Multiple rejections from $25k correlate perfectly with BTC macro TA which is a valid reason to TP at these levels, but Notorious BID is still trying to push the price up,” a tweet said.
“Based on history, and the potential to tear through upside illiquidity, I’m still scalping long.”
Material indicators added that “From a TA perspective this should be a local top, but Notorious BID is still running the binance order book.”
“They are deploying BTC request liquidity out of the $25k – $25.5k range into the active trading zone, so resistance is diminishing,” a portion of the comments added.
A potential plan among such traders could be to trigger a large price rally, prompting retail investors to pile in or go long, only to be stuck as whales distribute BTC to the market at higher levels.
China May Boost ‘Liquidity Junkie’ Crypto
With US markets closed for a holiday, meanwhile, one analyst turned to the longer-term implications of moves by China.
Related: A “snap back” to $20K? 5 things to know in Bitcoin this week
In addition to potentially giving Hong Kong retail investors access to previously banned crypto, China’s central bank injected a record $92 billion in liquidity into the economy on February 17.
“While most analysts are focused on how Fed tightening will reprice risk assets this cycle, they fail to assess the extent of easing in the East,” argued the popular Twitter account Tedtalksmacro in a thread.
It explained that unlike in the US, where the Fed is extracting liquidity via quantitative easing (QT), China is doing the opposite. In 2020 during the Fed’s COVID-19 quantitative easing (QE), risk assets including crypto saw an eighteen-month bull run.
“Crypto is not tied to any particular economy or entity, but rather is a liquidity junkie – it longs for the risk-hungry investor to cash in and bet on the fastest horse. That’s set to be exactly what will happen this year in China ,” the thread continued.
As Cointelegraph reported, US liquidity is already a major talking point in the performance of cryptoassets, with Arthur Hayes, former CEO of derivatives giant BitMEX, predicting the downside to continue in the second half of 2023.
“Of course not all the cash the PBoC injects will end up in risk assets. But I’d bet a decent chunk of it will!” Tedtalksmacro nevertheless concluded.
“Just as we saw from the West in 2020, increased liquidity from central banks = prices of risky assets (like BTC) go up.”
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