Bitcoin traded back above $18,000 on Dec. 10 after a volatile day’s trading saw bulls avoid a trip to lower levels.
Data from price trackers including CoinMarketCap and TradingView showed Bitcoin continuing to wobble on Thursday, with traders still waiting for direction.
Previously, a period of consolidation had given way to freefall for BTC/USD, the pair hitting lows of $17,650 before a swift rebound. Thereafter, the situation remained tenuous, Bitcoin testing $18,000 after hitting highs of $18,640 overnight.
BTC price far from bullish rebound
With impressive recoveries from sudden dips characterizing Bitcoin over the past month, opinions were mixed as to overall market direction.
In his latest YouTube update, popular social media trader Michaël van de Poppe noted that $17,700 had seen multiple recent tests and should therefore form a bottom in the event of fresh weakness.
Conversely, $19,400 would need to be secured in order for Bitcoin’s previous bull run to restart.
“The first area of support is around $17,600-17,800,” a subsequent tweet confirmed.
At $17,650, Bitcoin came within $700 of closing the latest gap in CME futures markets, a feature which continued a historical trend. Whether or not this would be sufficient to prevent any further collapse also remained a topic of debate among analysts.
As Modern Consensus reported, exchange orderbook data shows that the only convincing blanket support level lay at $16,200 this week.
Buzz Phrase “Liquidity Crisis”
Despite the potential for fresh losses, however, others looked at investor habits to predict that in the long term, Bitcoin would return healthier than ever. For Danny Scott, CEO of UK exchange Coin Corner, the continuing withdrawal of funds from exchanges was a sign of bullish foundations being laid once again.
According to data from on-chain analytics service Glassnode, exchange balances were at their lowest in two and a half years this week.
“I keep repeating this, but a #Bitcoin liquidity crisis is playing out in front of our eyes,” Scott wrote on Twitter.
“#Bitcoin removed from Exchanges is continuing to drop. Another $700 million removed off exchanges this last week, more people are stacking.”
His perspective echoes that of statistician Willy Woo, as well as Ki Young Ju, CEO of fellow analytics resource CryptoQuant, who previously noted the correlation between exchange balances and price performance.
“Bitcoin on-chain structure saying to bulls ‘thou shall not pass,’ not without a reset,” Woo wrote earlier this week.
“A reset means many weeks of sideways or a decent bearish dip. Will we get a dip? There’s no impulse of coin movements that’s strongly bearish just yet. Waiting game.”
An agreement on a fresh round of coronavirus stimulus from the US could meanwhile provide an external price influence this week. The European Central Bank (ECB) said on Thursday that it would expand its virus-related bond buying scheme by €500 billion ($605 billion).