Bitcoin, 'Uneasy' Even After Defending $70,000...Warning of Weak Trading Volume Behind Dip Buying

▲ Bitcoin (BTC)/ ChatGPT generated image

Dip buying for Bitcoin (BTC) has stepped up to defend the $70,000 mark. However, an analysis suggests that the trading volume in the spot and futures markets is not strong enough to create a trend reversal, meaning the downward pressure has not fully abated.

According to Cointelegraph, a cryptocurrency specialized media outlet, on May 31 (local time), Bitcoin's dip buying is appearing near the bottom of its trading range, and some new leveraged long positions have also formed. However, Cointelegraph pointed out that spot and futures trading volumes are not sufficient to reverse the downtrend.

Last week, $1.42 billion flowed out of Bitcoin ETFs, following $1.26 billion in the previous week, indicating that selling pressure once again overwhelmed the market. After Bitcoin fell to $72,500, concerns grew in the market about a re-entry into the $60,000 to $70,000 trading range that persisted from February to April. However, spot trading volume stepped in to defend the $70,000 support level, partially preventing further sharp declines.

Cointelegraph analyzed that considering ETF sales, Bitcoin inflows to Coinbase, and the scale of liquidations in the futures market, it is difficult to say that dip buying still holds an advantage in terms of cumulative volume delta (CVD) for spot. On the other hand, the open interest heatmap shows approximately $300 million in open interest concentrated in the $73,000 to $74,000 range, and it appears that new leveraged long positions have opened in this section.

Hyblock's bid/ask ratio indicator also shows that some buying interest is alive. This indicator, based on a 10% integrated order book depth, has currently shifted towards a buying advantage, suggesting that traders are viewing prices below $75,000 as a discount zone and are entering purchases. The indicator moves between minus 1 and plus 1, and a value above 0 signifies that the imbalance in the order book structure is growing towards buying.

However, the current perpetual futures long positions and spot buying activity are not sufficient to consistently reverse the downtrend. Cointelegraph diagnosed that while this buying interest is helping to absorb selling pressure and create a support level below Bitcoin's price, a stronger catalyst is needed for a full reversal. In the short term, variables that could trigger larger spot and futures positions include a peace agreement between the US and Iran, a switch to net inflows for Bitcoin spot ETFs, falling oil prices, and statements from the US White House regarding the potential addition of Bitcoin to strategic reserve assets.

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