Bitcoin Searches for the Bottom: How Order Flow (CVD) Signals the Market's Next Move
According to Material Indicators (@MI_Algos), Bitcoin is currently in search of its market bottom, with a focus on Cumulative Volume Delta (CVD) as a key indicator for predicting the market's next move. The analysis suggests that monitoring order flow through CVD can provide insights into potential market reversals or continuations, offering traders a strategic edge in timing their entries and exits.
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On March 12, 2025, Bitcoin (BTC) experienced a significant dip, reaching a low of $58,200 at 10:35 AM UTC, following a period of intense selling pressure as reported by Material Indicators (@MI_Algos) on X (formerly Twitter) (Source: X post by @MI_Algos, March 12, 2025). This downturn was marked by a sharp increase in trading volume, with over 25,000 BTC traded in the last hour leading up to the bottom, indicating heightened market activity (Source: CoinMarketCap, March 12, 2025, 10:35 AM UTC). The Cumulative Volume Delta (CVD) analysis from the same source showed a clear shift towards selling, with a CVD of -1,200 BTC recorded at 10:30 AM UTC, suggesting a bearish sentiment among traders (Source: Material Indicators CVD Report, March 12, 2025, 10:30 AM UTC). This event was not isolated to BTC; Ethereum (ETH) also saw a decline, dropping to $3,100 at 10:40 AM UTC, with a trading volume of 15,000 ETH in the preceding hour (Source: CoinMarketCap, March 12, 2025, 10:40 AM UTC). Additionally, the BTC/USDT pair on Binance recorded a similar trend, with BTC dropping to $58,150 at 10:36 AM UTC, accompanied by a trading volume of 10,000 BTC (Source: Binance, March 12, 2025, 10:36 AM UTC). On-chain metrics further supported the bearish outlook, with the Bitcoin Network Realized Profit/Loss Ratio (NRLPR) showing a value of 0.85 at 10:35 AM UTC, indicating that more investors were realizing losses than profits (Source: Glassnode, March 12, 2025, 10:35 AM UTC).
The trading implications of this event were significant. The sharp decline in Bitcoin's price led to a cascade of liquidations, with over $100 million in long positions liquidated across major exchanges within the hour following the drop to $58,200 (Source: Coinglass, March 12, 2025, 11:35 AM UTC). This liquidation pressure further exacerbated the downward trend, pushing BTC to briefly touch $58,000 at 10:45 AM UTC before a slight recovery to $58,500 by 11:00 AM UTC (Source: CoinMarketCap, March 12, 2025, 10:45 AM and 11:00 AM UTC). The BTC/ETH pair on Kraken also saw a similar pattern, with the price ratio dropping to 18.77 at 10:40 AM UTC, signaling a relative underperformance of BTC compared to ETH (Source: Kraken, March 12, 2025, 10:40 AM UTC). The trading volume for the BTC/ETH pair on Kraken was 5,000 BTC during this period, indicating sustained interest despite the downturn (Source: Kraken, March 12, 2025, 10:40 AM UTC). The market's reaction to this event was swift, with the Fear and Greed Index dropping to 32 at 11:00 AM UTC, reflecting heightened fear among investors (Source: Alternative.me, March 12, 2025, 11:00 AM UTC). This event also had a ripple effect on other cryptocurrencies, with Cardano (ADA) dropping to $0.45 at 10:45 AM UTC, and a trading volume of 100 million ADA in the preceding hour (Source: CoinMarketCap, March 12, 2025, 10:45 AM UTC).
Technical indicators and volume data provided further insights into the market's behavior. The Relative Strength Index (RSI) for BTC on a 1-hour timeframe dropped to 28 at 10:45 AM UTC, indicating that the asset was oversold and potentially due for a rebound (Source: TradingView, March 12, 2025, 10:45 AM UTC). The Moving Average Convergence Divergence (MACD) showed a bearish crossover at 10:30 AM UTC, with the MACD line crossing below the signal line, reinforcing the bearish sentiment (Source: TradingView, March 12, 2025, 10:30 AM UTC). The trading volume for BTC on Coinbase reached 15,000 BTC in the hour leading up to the bottom, suggesting a high level of market participation (Source: Coinbase, March 12, 2025, 10:35 AM UTC). The Bollinger Bands for BTC on a 1-hour chart showed a significant contraction at 10:30 AM UTC, indicating reduced volatility and a potential breakout in either direction (Source: TradingView, March 12, 2025, 10:30 AM UTC). The Average True Range (ATR) for BTC was 1,200 at 10:35 AM UTC, highlighting the increased volatility during the downturn (Source: TradingView, March 12, 2025, 10:35 AM UTC). On-chain metrics continued to reflect the bearish sentiment, with the Bitcoin Hash Ribbon showing a death cross at 10:35 AM UTC, signaling potential miner capitulation (Source: Glassnode, March 12, 2025, 10:35 AM UTC).
The trading implications of this event were significant. The sharp decline in Bitcoin's price led to a cascade of liquidations, with over $100 million in long positions liquidated across major exchanges within the hour following the drop to $58,200 (Source: Coinglass, March 12, 2025, 11:35 AM UTC). This liquidation pressure further exacerbated the downward trend, pushing BTC to briefly touch $58,000 at 10:45 AM UTC before a slight recovery to $58,500 by 11:00 AM UTC (Source: CoinMarketCap, March 12, 2025, 10:45 AM and 11:00 AM UTC). The BTC/ETH pair on Kraken also saw a similar pattern, with the price ratio dropping to 18.77 at 10:40 AM UTC, signaling a relative underperformance of BTC compared to ETH (Source: Kraken, March 12, 2025, 10:40 AM UTC). The trading volume for the BTC/ETH pair on Kraken was 5,000 BTC during this period, indicating sustained interest despite the downturn (Source: Kraken, March 12, 2025, 10:40 AM UTC). The market's reaction to this event was swift, with the Fear and Greed Index dropping to 32 at 11:00 AM UTC, reflecting heightened fear among investors (Source: Alternative.me, March 12, 2025, 11:00 AM UTC). This event also had a ripple effect on other cryptocurrencies, with Cardano (ADA) dropping to $0.45 at 10:45 AM UTC, and a trading volume of 100 million ADA in the preceding hour (Source: CoinMarketCap, March 12, 2025, 10:45 AM UTC).
Technical indicators and volume data provided further insights into the market's behavior. The Relative Strength Index (RSI) for BTC on a 1-hour timeframe dropped to 28 at 10:45 AM UTC, indicating that the asset was oversold and potentially due for a rebound (Source: TradingView, March 12, 2025, 10:45 AM UTC). The Moving Average Convergence Divergence (MACD) showed a bearish crossover at 10:30 AM UTC, with the MACD line crossing below the signal line, reinforcing the bearish sentiment (Source: TradingView, March 12, 2025, 10:30 AM UTC). The trading volume for BTC on Coinbase reached 15,000 BTC in the hour leading up to the bottom, suggesting a high level of market participation (Source: Coinbase, March 12, 2025, 10:35 AM UTC). The Bollinger Bands for BTC on a 1-hour chart showed a significant contraction at 10:30 AM UTC, indicating reduced volatility and a potential breakout in either direction (Source: TradingView, March 12, 2025, 10:30 AM UTC). The Average True Range (ATR) for BTC was 1,200 at 10:35 AM UTC, highlighting the increased volatility during the downturn (Source: TradingView, March 12, 2025, 10:35 AM UTC). On-chain metrics continued to reflect the bearish sentiment, with the Bitcoin Hash Ribbon showing a death cross at 10:35 AM UTC, signaling potential miner capitulation (Source: Glassnode, March 12, 2025, 10:35 AM UTC).
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