"Aggressive Buyers Missing, Empty Rally" Bitcoin Short-Term Volatility Expected to Increase

▲ Bitcoin (BTC), Gold/AI generated image ©

While the leading cryptocurrency Bitcoin (BTC) is holding above $75,000 and solidifying a technical upward structure, an analysis of underlying data has raised warnings that actual buying demand is, in fact, decreasing, requiring investors' caution. The analysis suggests that an empty momentum might be hidden within what appears to be a robust rally.

According to the cryptocurrency specialized media Bitcoinist on May 2nd (local time), prominent virtual asset analyst MorenoDV pointed out internal market data that contradicts Bitcoin's price increase, exposing the fragility of the current market. On charts, Bitcoin appears to be consistently raising its lows since the March bottom, climbing to around $76,000 and seemingly poised for an upward breakout.

However, the funding rate on Binance, the world's largest exchange driving global derivatives liquidity, tells a completely different story. Despite the current price increase, the funding rate remains almost unmoved near zero. In a typical bull market, leveraged long (buy) positions betting on a rise should surge, pushing up the funding rate, but aggressive capital driving these positions is currently missing.

The situation is similar in the spot market. MorenoDV analyzed that Taker buy transaction volume, which involves immediately purchasing assets at market price, is continuously decreasing, inversely proportional to the price increase. This means that while the price continues to rise, aggressive buyers willing to pay a premium to urgently acquire Bitcoin are increasingly scarce. This abnormal divergence, where prices rise but internal demand falls, creates significant uneasiness in the market.

Two conflicting interpretations coexist regarding this. One is a positive scenario where large institutional investors are quietly accumulating assets with limit orders to avoid shocking the market. On the other hand, a negative interpretation also gains traction, suggesting it's merely a weak market where prices rise even with small order books simply because selling pressure has disappeared. If the latter is true, there is a high risk that the upward rally could collapse like a sandcastle with just a small amount of selling pressure.

Currently, Bitcoin is poised at the $77,400 level, eyeing a breakout of the strong resistance zone between $77,000 and $78,000. If it can maintain the $73,000-$74,000 range, which is acting as a short-term support, an upward momentum towards $82,000 could be expected. However, if it fails to break out and even the major support levels collapse, it could plummet to the $69,000-$70,000 range. Therefore, market attention is focused on the current precarious rally, accompanied by empty demand.

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