Insights Into The Bitcoin Market Through Bid Liquidity Movement
Author: Andrew WatsonAs of this writing, it appears that a similar entity is active in the market again, with bid liquidation movements that look similar to what was seen in Q1. However, the buy walls are changing size which could be a strategic move by the large buyer to push the price up to a higher distribution range and use those bids as exit liquidity. Despite the change in the bid wall, Bitcoin’s support level has been proven to be stable, suggesting a possibility of a bounce back.
According to Gaah, a researcher and analyst from the CryptoQuant Firm, the MVRV (market-value-to-realized-value) ratio can tell a lot about investor behavior. The ratio is determined by the market capitalization of Bitcoin and its realized capitalization which is the sum of all transactions since they were last moved on-chain. When the MVRV ratio is in green quadrant numbers (below a value of 1.44) the market is in the accumulation zone. This can be translated to a decreased selling pressure in the market as investors believe that the actual value of Bitcoin is higher than its current market price.
It's true that it can be difficult to predict the market trend for Bitcoin. Nonetheless, by analyzing data and recording bid liquidity movements, it can offer valuable insights into market activity as well as help investors make well-informed decisions about the direction of the cryptocurrency market.