Bitcoin price holds above $111,000 today as BTC order book depth returns
- Novogratz: Bitcoin's structure has been preserved despite the drop in liquidity.
- Deleveraging reduces risk as market makers restore order book depth.
- BTC is currently trading at $111,000 and has consolidated above $107,500, with consolidation favoring a rise to $118,000.
Galaxy Digital CEO Mike Novogratz believes the cryptocurrency market structure will remain unchanged despite the drop in liquidity earlier this month.
He characterized the event as a significant deleveraging that did not disrupt Bitcoin's core architecture. Order book depth, which had shrunk during the shakeout, began to recover as major participants returned and spreads normalized.
Bitcoin Price Today: $111,260 After October 10 Liquidity Shock
Earlier this month, the market experienced one of the largest liquidity squeezes, which saw many leveraged traders sidelined and market makers sidelined, leading to a reduction in market depth on major trading venues.
Novogratz acknowledged the risk associated with the reduction in market makers' presence, but stated that the market cleanup had eliminated excess leverage. After the cleanup, orders began to fill, and two-way flow improved, even though conditions remain more favorable than before the crash.
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A crypto market expert described the consequences as a combination of advantages and disadvantages. The positive aspect is that reducing leverage reduces systemic stress. The negative aspect is that it may take several weeks or months for market depth and confidence to fully recover.
What Novogratz expects from Bitcoin in the future
Despite conflicting opinions, Novogratz believes that the ongoing devaluation of fiat currencies in major economies is crucial to the growing popularity of Bitcoin and cryptocurrency.
Market participants generally believe that the market structure bill will be passed by the Senate within the next six weeks, giving the cryptocurrency market a significant boost.
Meanwhile, Bitcoin is reflecting positive signals, forming a base and establishing support in a favorable area following the recent collapse. This pioneering cryptocurrency has bounced off the $107,500 support several times, sending positive signals pointing to a return to higher levels.
BTCUSD daily chart on TradingView
Why Bitcoin Consolidation Matters
According to TradingView, at the time of writing, Bitcoin was trading at $111,260, representing a 7.5% recovery from its historic price crash on October 10.
While the lack of liquidity is evident in the cryptocurrency's current behavior, which confirms Novogratz's observations, analysts believe that a breakout above the current support level will boost user confidence and demand for Bitcoin, pushing the price to higher levels.
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Source: cryptonews.net
