Bitcoin crumbles below $109K, but data shows buyers stepping in

Bitcoin price tumbled toward new lows below $109,000 and while charts suggest the sell-off is far from over, data shows spot buyers accelerating their accumulation.

• Bitcoin’s sell-off intensified, but data shows spot buyers increasing their allocation size. 
• Liquidation heatmap data suggests the sell-off could extend to $107,000.

Bitcoin fell to a 2-week low of $108,865 on Thursday, and while an assortment of entities have shown interest in buying the range lows, this week, selling during the Asia trading session has chipped away at the gains accrued through each rebound rally in the US session.

Throughout the past week, traders have stepped in to buy intra-day lows, but liquidation heatmap data from Hyblock shows a liquidation cluster comprised of leveraged long positions at risk of absorption from $111,000 to $107,000. 

In addition to the downside liquidation risk, activity in perpetual futures markets continues to drive Bitcoin’s day-to-day price action, and heavy selling from the institutional investor-sized cohorts (1,000 to 10 million) continues to overwhelm the spot purchasing seen among retail-investor-sized (100 to 1,000) orders.  

Despite Bitcoin nearly falling below $110,000, the notable development of the day is the aggregate spot orderbook bid-ask ratio tilting back toward buyers. The metric measures “the relationship between the number of buy orders (bids) and sell orders (asks) in an order book,” and the ratio ranges between -1 and 1, with zero showing an equal number of buy and sell orders in the order book.

While the spot volumes pale in comparison to the buying and selling seen across perpetual futures markets, the re-emergence of a bid-ask ratio tilted toward bulls is a first since it was last seen between Sept. 5 to Sept. 7, right before BTC rallied from $107,500 to its recent price top at $118,200.