Bitcoin Traders Keep “Buying the Dip” But BTC Is Still Stuck in a Downtrend? Here’s Why!
Key Points:
- Retail traders are actively buying as BTC corrects in both spot and futures markets, but net selling from large-cap investors is holding back the strong recovery.
- The risk of another deep liquidation towards $105,000 seems unlikely, but investor sentiment is currently out of step with the trend shown in cumulative volume data.
Both BTC and ETH are currently trying to recover the price levels lost during the sharp sell-off from Saturday to Monday. Bitcoin price only inched up 2.4% from the Dip of $108,665, while ETH recovered better, rising 8.26% to an intraday high of $4,663, from a Dip of $4,310 on Monday.
Data shows that many groups of traders are still “buying the Dip,” but BTC price is still stuck in a downtrend. The anchored cumulative Volume delta (aggregated) indicator for retail traders ($1,000-$10,000) shows that they were net buyers throughout the correction from Sunday to Wednesday.
In contrast, whales and institutional traders ($1 million – $10 million) were net sellers during the same period, but the chart shows that selling pressure eased as BTC price reclaimed the $111,000 region.
A closer look at CVD data shows that retail traders in the spot market and Binance Bitcoin perpetual Futures Contract continued to open Longing positions throughout the correction, while whales and institutional investors were net sellers.
In Coinbase’s spot market, retail traders were also active, with a net buy volume of $101.253 million. In contrast, institutional investors at Coinbase and Binance were net sellers, with the perps market recording an Dump of about $7.5 billion in the same time frame.
The bottom line is that whales still dominate the overall market selling pressure, while retail traders and Medium groups try to provide support, believing that they are buying Bitcoin at a discount or expecting a short-term pullback to the $117,000-$118,000 zone. However, despite positive CVD readings from smaller orders on Binance and Coinbase, Bitcoin remains stuck in a short-term downtrend.
$120,000 or $105,000 – which will come first?
Liquidation heatmap data from Hyblock shows that Bitcoin absorbed buying pressure around the $111,000-$110,000 range during the weekend sell-off, and there is another liquidation cluster near $104,000. Although a break below this lowest liquidation cluster is considered unlikely, the selling momentum from large orders is overwhelming that of retail traders, continuing to put pressure on BTC price.
Traders expecting a consolidation period should keep a close eye on the anchored aggregated daily CVD indicator to XEM if selling pressure is easing, and whether this change in volume is in sync with a shift in investor sentiment.
The information in this article is for informational purposes only and should not be XEM investment advice. The cryptocurrency market is highly volatile and carries many risks. Investors should conduct their own research, consider their personal risk appetite, and consult a financial professional before making any investment decisions.
