💰 Bitcoinexican Standoff: Spot Demand Soars, but a Sly Catch Lurks! 💰

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Ah, my dear reader! Gather ’round for a tantalizing tale of digital gold, bitcoin (BTC), and its recent escapades! Over the course of nine eventful days, BTC plunged into the abyss of $90,000, only to rise like a phoenix and soar above $108,500! Astonishing, isn’t it?

Our friends at Bitfinex, the illustrious crypto exchange, have attributed this rollercoaster ride to the resurgence of spot demand, particularly among the digital denizens of American exchanges. The Bitfinex Alpha report, a trusted oracle of crypto wisdom, declared that bitcoin’s recovery demonstrated its might compared to the stock market.

BTC’s Dazzling Spot Demand Recovery

Alas, on the fateful day of January 13, BTC plummeted to a dismal $89,300, triggering a staggering $818 million in both short and long liquidations. But, as the stars aligned for President Donald Trump’s inauguration, bitcoin’s value ascended alongside spot and institutional demand.

During this thrilling recovery, the market witnessed a frenzy of taker buy pressure. This was evident in the dramatic uptick of the Spot Cumulative Volume Delta (CVD), a clever metric that tracks the difference between market buy and sell orders. An explosive increase in the CVD indicates that buying pressure is dominant in the spot market, buyers are frantically lifting ask prices, and there is a strong desire and potential upward momentum for BTC.

“The noticeable aggression from spot market buyers as traditional markets were about to close only reinforces this view, with strong demand from both short-term holders and institutional investors. This consistent buying from the U.S. has been key to BTC maintaining its position as one of the best performing risk assets since the U.S. election results were announced in early November,” Bitfinex proclaimed.

The Sly Catch

Indeed, the spot demand recovery has been a delightful spectacle for BTC, but, dear reader, it comes with a twist! The surge in demand has an unexpected consequence: bids take time to refill when the market experiences such aggressive buying pressure. As a result, BTC might experience a slight pullback, especially if a sell-the-news event occurs.

Those cunning perpetual traders who bought BTC in anticipation of President Trump’s inauguration and the pro-crypto environment during his tenure might be taking profits in the coming days. Such investor maneuvers could exacerbate any BTC correction.

As we speak, BTC has already retreated to the $101,000 level after reaching an all-time high of $109,300 just before the inauguration. However, short-term holders have established a support/resistance level at their realized price of $89,438, making it challenging for BTC to fall below this range.

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2025-01-21 16:04