Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s price tumbled below $109,000 on Thursday, reaching a two-week low, but underlying data suggests a significant acceleration in spot buyer accumulation. Despite continued selling pressure in perpetual futures markets and from larger institutional investors, a key metric — the aggregate spot orderbook bid-ask ratio — has begun to tilt back in favor of buyers, hinting at potential demand at these lower price levels.
Price Action and Market Dynamics
The cryptocurrency fell to $108,865, with selling during the Asia trading session consistently eroding gains made during U.S. trading hours. While traders have shown consistent interest in buying intra-day dips throughout the past week, the overall market sentiment has been dampened by persistent downward pressure.
Liquidation heatmap data indicates a significant cluster of leveraged long positions at risk between $111,000 and $107,000. This suggests potential for further liquidations if the price continues its descent, which could exacerbate downward momentum.
Activity in perpetual futures markets remains a primary driver of Bitcoin’s daily price movements. Institutional investor-sized cohorts, defined as those holding 1,000 to 10 million Bitcoin, have been a source of heavy selling, largely overwhelming the spot purchasing observed among retail-investor-sized orders, typically holding 100 to 1,000 Bitcoin.
Emerging Spot Buyer Interest
Despite the price nearly falling below $110,000, a notable development is the aggregate spot orderbook bid-ask ratio shifting back toward buyers. This metric measures the relationship between buy orders (bids) and sell orders (asks) in an order book, ranging from -1 to 1, with zero indicating an equal number of orders.
A bid/ask ratio greater than 0 suggests a higher number of buy orders than sell orders, implying increased demand for the asset at its current price. When set to 10% depth at spot exchanges only, this ratio began tilting toward buyers as Bitcoin’s price dropped from $111,200 to $110,553.
Further proof of this buying activity is visible in the anchored four-hour cumulative volume delta, which recorded a surge in buy volume. While these spot volumes are smaller compared to the significant buying and selling in perpetual futures markets, the re-emergence of a bullish-tilted bid-ask ratio is a significant indicator.
Looking Ahead
The last time the bid-ask ratio showed such a tilt toward bulls was from September 5 to September 7, preceding a rally that saw Bitcoin climb from $107,500 to its recent peak of $118,200. This suggests that while short-term pressures from futures markets and institutional selling persist, a foundational buying interest is materializing in the spot market at these lower price points, potentially setting the stage for future price recovery.
