Bitcoin regains $25K amid hope record China easing will boost BTC price

Bitcoin (BTC) spent another day fighting $25,000 on February 20 as analysts continued to warn of market manipulation.

Hourly candlestick chart BTC/USD (Bitstamp). Source: Trading View

Bitcoin backed by ‘infamous BID’

Data from Cryptooshala Markets Pro and trade view showed that BTC/USD is making up for losses around the weekly close to get close to the $25,000 mark again at the time of writing.

However, the bulls still could not provoke a change in resistance and support, and the activity of the whales on the exchanges aroused suspicion.

In its latest update, monitoring of the Material Indicators resource showed that high volume traders were artificially thinning out the upper resistance, increasing the likelihood that BTC/USD would move higher.

Co-founder Keith Alan mentioned a supply liquidity wall supporting the spot price, which he called “the proverbial supply offer”.

“Multiple deviations from $25k are highly correlated with BTC’s macro TA, which is a good reason for TP at these levels, but Notorious BID is still trying to push the price higher,” the tweet reads.

“Based on history and the potential to overcome rising illiquidity, I am still scalping long positions.”

Material indicators added that “from TA’s point of view, it should be a local top, but Notorious BID still rules Binance’s order book.”

“They are distributing liquidity on demand for BTC from the $25k to $25.5k range into the active trading area, so the resistance is easing,” the comment section also reads.

A potential plan by such traders could be to trigger a big price spike by having retail investors pile up or go long and then get stuck as the whales spread BTC into the market at higher levels.

BTC/USD order book data (Binance). Source: Keith Alan/Twitter

China may stimulate ‘liquidity junkie’ crypto

Meanwhile, with US markets closed for the holiday, one analyst turned to the longer-term implications of moves out of China.

Return to 20 thousand dollars? 5 things to know about Bitcoin this week

In addition to potentially giving Hong Kong retail investors access to the previously banned cryptocurrency, China’s central bank injected a record $92 billion of liquidity into the economy on Feb. 17.

“While most analysts are focused on how the Fed’s tightening will lead to a repricing of risk assets this cycle, they don’t take into account the scale of easing in the east,” popular Twitter account Tedtalksmacro said.

It explains that unlike the US, where the Fed is withdrawing liquidity through quantitative tightening (QT), China is doing the opposite. In 2020, as part of the quantitative easing (QE) of the Fed in connection with COVID-19, risky assets, including cryptocurrency, showed an eighteen-month bullish growth.

“Cryptocurrency is not tied to any particular economy or organization, but rather is a liquidity junkie – it craves for the risk-hungry investor to get their money and bet on the fastest horse. This is exactly what will happen this year in China,” the thread continued.

As reported by Cryptooshala, U.S. liquidity is already a major talking point when it comes to crypto asset performance, with Arthur Hayes, former CEO of derivatives giant BitMEX, predicting the downturn will continue into the second half of 2023.

“Of course, not all cash injected by the NBK will end up in risky assets. But I bet there will be a decent portion! Tedtalksmacro nevertheless concluded.

“Just as we saw in the West in 2020, increased liquidity from central banks = prices of risky assets (like BTC) are rising.”

Annotated chart of BTC/USD versus US liquidity. Source: Tedtalksmacro/Twitter

The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of Cryptooshala.

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