Bitcoin’s Current Level Is More Vulnerable Than You Think

While Bitcoin (BTC) approaching the $100,000 milestone is an obvious show of strength, the cryptocurrency appears highly vulnerable to potential negative news at its current level.

According to the order book skew rate, buyers lose their strength as they approach six figures. The ratio compares the buying side (bid) with the number of people willing to sell (demand).

The three-day moving average of the 1% skew, which measures bid-ask imbalance within 1% of the average price, continues to rise, approaching levels seen only three times since 2022, according to data tracked by cryptocurrency broker FalconX.

This rate is a sign that the upward momentum that has pushed prices from $68,000 to close to $100,000 since the US elections at the beginning of the month has not been renewed by new buying interest, leaving sellers in a more dominant position. Therefore, the slightest negative news can lead to a significant price correction.

According to the statement made by FalconX, although the developments do not threaten the medium-term rally, the struggle to rise above the $ 100,000 level may be quite intense.

Bitcoin’s uptrend remained stagnant throughout the weekend after peaking at $99,500 on Friday. The dominance rate, which refers to a cryptocurrency’s share of overall crypto market volume, has dropped sharply from 61.5 percent to 59 percent over the past three days. The decline highlighted the transfer of funds from bitcoin to altcoins and the possibility of a price correction.

According to FalconX, a correction above $100,000 seems likely to occur in all scenarios, as market liquidity has decreased despite the increase in trading volumes.

Liquidity refers to the market’s ability to absorb large buy and sell orders at stable prices. The drop in liquidity means that a few large orders could have a large impact on the market, potentially causing rapid price fluctuations.