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BTC price retracement aims to reach all-time highs
Inflation data fails to slow Bitcoin's momentum
Bitcoin ( BTC ) approached 1% from its all-time high on Dec. 12 as whales exhausted liquidity on the sell side.
BTC/USD 4-hour chart. Source: Cointelegraph/TradingView
BTC price retracement aims to reach all-time highs
BTC/USD has returned to $102,000 following the Wall Street open, according to data from Cointelegraph Markets Pro and TradingView.
Bitcoin has strengthened since the previous day, forming a green candlestick around $5,000 on the day.
Analyzing recent movements, trading resource Material Indicators sheds light on large-volume traders.
“FireCharts’ trashed CVD shows whales are back to placing whale-sized market orders,” the company wrote in a post on its X site, referring to one of the company’s proprietary trading tools.
“Now that BTC has reached deeper concentrations of demand liquidity, whales can place these larger market orders without the slippage they endured in the previous 2 days when price was moving in a range with thinner liquidity.”
BTC/USDT order book liquidity for Binance by whale volume. Source: Material Indicators/X
The accompanying chart shows increases and decreases in volume and liquidity levels for various whale groups on the BTC/USDT pair on the world's largest exchange, Binance.
Popular trader Skew noted, however, that overall sell-side pressure remains intense enough to “limit” the potential upside of the BTC price.
"As long as passive buyers continue to swallow, we will eventually fall apart," X told his followers.
Striking a more cautious tone, on-chain data account Bitcoin Researcher argued that short-term investor profitability needs to cool for price growth to remain sustainable.
This was measured using the market value-to-realized value (MVRV) metric for short-term holders (STHs) of Bitcoin; STHs are speculative entities that hold a given unit of BTC for up to 155 days.
"I would like to see the Short-Term Investor MVRV return to a level closer to its base level," was the statement made in an X post that day.
"A rising price without a STH-MVRV reset usually signals an impending market top; this is rarely sustainable for long. With or without a reset, both outcomes provide clear, yet opposing on-chain signals."
Bitcoin STH-MVRV chart. Source: The Bitcoin Researcher/X
Inflation data fails to slow Bitcoin's momentum
Bitcoin shrugged off the US inflation surprise, with the Producer Price Index (PPI) rising 3.0% in November, above expectations.
Related: Bitcoin 'Skewness' Index Shows $110K BTC Price Will Be Hard to Break
Contrary to the Consumer Price Index (CPI) data released the previous day, which met estimates, the PPI painted a picture of what trade source Kobeissi Letter described as a "reversal" in inflation.
One of X’s analytical articles asked, “Has the era of stagnant inflation begun?”
Stagnant inflation has become a hot topic among market commentators amid rising inflation and weakness in the labor market, Cointelegraph reported.
The probability that the Federal Reserve will cut interest rates by 0.25% at its Dec. 18 meeting is over 98%, according to the latest data from CME Group's FedWatch Tool, which tracks PPI.
Fed target rate probabilities. Source: CME Group
This article does not contain investment advice or recommendations. Every investment and trading activity involves risk and readers should do their own research when making decisions.
