Bitcoin: Bullish sentiment, yes, but are buyers tired now?

• The rising Korean Premium Index showed bullish sentiment among retail traders.
• The lack of buying volume in recent days showed buyer exhaustion.

Bitcoin [BTC] trended even higher in February and managed to smash past the psychological round-number resistance of $50k.

This filled the market with bullish conviction, as seen from the rising Open Interest behind BTC, according to Coinglass data.

Yet, another metric has been climbing higher, one that usually marks the local top for Bitcoin. The Bitcoin Korea Premium Index hit a 3.98% high on the 16th of February.

Short-term bullish enthusiasm is intense

The Korean crypto market has regulations against institutional investors. Hence, it is made up largely of retail traders, who might not be privy to the data that institutions possess.

In a way, the Korean market could be viewed as the closest approximation to retail traders’ sentiment.

Source: CryptoQuant

On the 12th of January, the KPI reached a high of 5.43% when BTC prices were at $42.8k. Ten days later, the price was at $39.5k. The recent jump in the KPI raised fears that another such drop in prices could follow.

The Open Interest data in the lower timeframes showed that the market sentiment has been muted in the past five days. Neither buyers nor sellers had a clear advantage, based on OI data from Coinalyze.

The Bitcoin range formation

Source: BTC/USDT on TradingView

Highlighted in purple was a range that Bitcoin has traded within for the past five days. It reached from $50.6k to $52.5k, and the mid-point at $51.5k has served as support as resistance.

After the strong move earlier this month, Bitcoin bulls were consolidating their gains. However, the falling OBV suggested that they might not have the power to sustain the rally further.

Source: Hyblock

AMBCrypto also analyzed the liquidation levels data from Hyblock to understand where prices might move next. The Cumulative Liq Levels Delta was negative and has been so for the past four days.

This showed that short liquidation levels outnumbered the longs.

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So, prices would likely hunt the short liquidations first before a potential reversal. To the north, two large liquidation levels worth $180 million and $211 million were present at $53.1k and $52.8k, respectively.

It is expected that Bitcoin would climb to these levels, and possibly as high as $53.6k, before reversing bearishly and hunting the long liquidations over the next week or two.