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Bitcoin’s Bullish Momentum Wanes Amidst Shifting Liquidity

Bitcoin, the world’s most prominent cryptocurrency, is experiencing a decline in its bullish momentum as significant liquidity shifts hint at an impending period of volatility. This warning comes from an analysis posted on September 6 by Keith Alan, the co-founder of monitoring resource Material Indicators. Alan’s observations focus on recent developments in the Binance order book, which indicate potential turbulence in the cryptocurrency market.

Despite Bitcoin’s price remaining within a tight range over the weekend, data from cryptocurrency exchanges suggests that this stability may not last much longer. In his analysis, Alan shared a snapshot of the BTC/USD order book on Binance, expressing concern over what he described as “concerning” changes in liquidity.

One noteworthy shift is the concentration of bid support around the $24,600 mark, a level not seen in spot markets since March. Alan commented that what troubles him most is that the largest accumulations of BTC bid liquidity have now moved below the previously established Lower Low (LL) at the bottom of the range.

BTC/USD experienced its lowest point since March back in mid-June when it briefly touched $24,750 before rebounding higher. Alan suggests that a similar bounce from the current spot levels may occur before any significant downside movement.

However, it’s important to note that bears have not yet gained complete control over the market. Alan does not see either the bulls or bears establishing substantial dominance at this stage. He believes that the recent shifts in liquidity don’t necessarily indicate a strong bearish momentum but rather suggest that the bullish sentiment is fading.

Previously, Keith Alan had emphasized that $24,750 was a critical level for the bulls to defend to maintain the broader uptrend in Bitcoin’s price.

Other prominent cryptocurrency traders have also weighed in on the situation. Skew, a well-known trader, concurred that volatility is likely to return soon, pointing to activity in the derivatives markets. Credible Crypto, another respected figure in the crypto space known for his relatively optimistic outlook on Bitcoin’s price, expressed hope that any potential downside would be limited to the high $24,000 range. He pointed out that the local low on major liquid/spot exchanges is around $25,200.

As Bitcoin traders and investors keep a close watch on these liquidity shifts and potential price movements, the cryptocurrency market remains as unpredictable as ever, highlighting the importance of staying informed and vigilant in this rapidly evolving landscape.

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