Lower market liquidity can send the BTC higher?
In the past few days, and as we can see in the bellow chart, market liquidity in the Bitcoin market has been falling. While in the past two months, the market liquidity eased 10%, we can also see the price is down almost 40%. Usually, when the price is decreasing or increasing, and the market volume is falling, we can say that the current up or downtrend is weakening. Since Bitcoin was in a clear downtrend, and along with this downtrend market volume decreased sharply, it can be the trend-changing signal. However, it is not the only market mover, therefore we can just say that it has more chance. On the flip side, breaching under 40K also can bring the much lower levels in the spotlight.
The latest exchanges data also shows that they are holding less than $100 billion Bitcoin. Many analysts believe that the recent spike in active investors in the Bitcoin market with the supply shortage on exchanges can lift the Bitcoin price.
From the technical point of view, the downtrend channel seems limited, and we are at the shoulder of a reverse head and shoulders pattern, around 44,600 US dollars. This is while the MACD signal line cuts the Histograms upwards for the second time, and we can read it as a bullish signal. Anyway, shoulders always are very critical levels and reverse from this level, can change the market direction.
