Bitcoin (BTC) is facing a formidable challenge as it attempts to surpass the heavily congested resistance at $50,000. Popular analyst Cole Garner highlighted Bitfinex, a cryptocurrency exchange, in a discussion on X. Bitfinex has become the focus of attention as liquidity demand increases.
Bitcoin experienced a 4% dip on February 13 due to unexpected inflation data from the United States. However, it quickly recovered and even reached a new two-year high. According to data from Cointelegraph Markets Pro and TradingView, BTC/USD brought the $52,000 level into play before the Wall Street opening on February 14.
Despite these positive developments, market observers have raised concerns about the liquidity landscape. Bulls may face difficulties as they attempt to push the market above $52,000 due to a significant influx of sell orders on Bitfinex. Garner described it as a “brick wall of asks” densely packed up to $52.3.
This situation is a result of the tug-of-war between sellers and the demand from newly-launched U.S. spot Bitcoin exchange-traded funds (ETFs). Although these ETFs consume a significant amount of BTC, they are currently facing an excess supply of liquidity in the crucial $50,000 zone. Garner believes that this behavior is characteristic of a particular entity, possibly Bitfinex, which has previously influenced the spot price of Bitcoin.
The focus is now on Bitfinex and its sister company, Tether, a stablecoin supplier. Bitfinex whale traders have historically exerted significant influence on the spot price through their trading volume. However, the identity of the liquidity provider remains unknown.
In contrast to the Grayscale Bitcoin Trust (GBTC), which experienced significant outflows in January, ETFs saw substantial inflows on February 13, surpassing $600 million. BlackRock’s ETF alone accounted for nearly half a billion dollars. This trend suggests that investors are shifting their attention from GBTC to ETFs.
It is important to note that this article does not provide investment advice. Readers should conduct their own research before making any investment or trading decisions as they involve risks.