The bitcoin (BTC) market resembles an iceberg at the moment, with the surface revealing a dominance of sellers that paints an overtly bearish sentiment. However, at deeper levels beneath the surface, bargain hunters are quietly waiting to snap up coins and potentially put a floor under prices.
On major spot and perpetual futures exchanges, the market trend has shifted significantly. The quote level, which reflects the ongoing market rate, has flipped from an uptrend to a downtrend, suggesting that more traders are opting to sell at the current market price. This insight, provided by data source Hyblock Capital, underscores the shifting dynamics in trading behavior.
The order book depth at varying levels showcases a similar trend. Order book depth, which represents the combined value of buy and sell orders at specific intervals (1%, 2%, 5%) from the current market price, indicates the market’s capacity to absorb large orders at stable prices. At the quote level, there was an upward trend that has now transitioned to a downward trend, indicating increasing selling pressure—this is often where market makers (MMs) operate. Notably, the behavior between the quote level and the 1% mark mirrors that of the MMs, reinforcing the seller dominance in the current market landscape.
The prevailing seller dominance near the quote level is hardly surprising, considering the recent price action in BTC. The leading cryptocurrency has experienced a decline from over $102,000 to approximately $94,000 within days, primarily driven by renewed concerns surrounding U.S. inflation. On Thursday, prices dropped as low as $92,500 at one point.
Yet, a deeper analysis reveals a contrasting narrative: the continued uptrend in market depth observed from 2% to 5%. This trend indicates a growing number of bids compared to asks at price levels further from the ongoing market rate, suggesting that buyers are strategically positioning themselves to enter the market at these levels.
According to Hyblock, “Between 1% – 2% and 2% – 5% of the book, we see increased demand, with more bids than asks over time.” This information highlights a subtle yet important shift in market sentiment, where patience from buyers may ultimately curtail the selling pressure.
As of now, Bitcoin is trading at around $94,000, with traders keenly awaiting the U.S. nonfarm payrolls release on Friday. This economic indicator is expected to provide the next directional cue for risk assets, including cryptocurrencies.
