Bitcoin

3 reasons why the price of Bitcoin only hit $ 16,000 for the first time since 2017

The price of Bitcoin (BTC) rose to over $ 16,000 for the first time in nearly three years on November 12. The dynamism of the dominant cryptocurrency is increasing due to three main factors.

The main catalysts for BTC’s rally are the unheated derivatives market, the $ 16,000 retest and the $ 14.9,000 whale supply zone.

The weekly chart of Bitcoin with the percentage increases. Source: TradingView.com

The recent crash has restarted the bitcoin derivatives market

On November 10, the price of Bitcoin fell sharply to $ 15,072. The market crash happened just 24 hours after another sharp drop to $ 14,805. which the traders did carefully.

3 reasons why the price of Bitcoin only hit $ 16,000 for the first time since 2017
3 reasons why the price of Bitcoin only hit $ 16,000 for the first time since 2017

But still, The decline benefited Bitcoin for two main reasons. First, the whales were able to leverage their positions around the $ 15,000 support. Second, it neutralized the futures market by eliminating late traders or long contract holders.

Adjusting the futures market and the rate of funding of Bitcoin futures contracts has been critical in sustaining the current surge in BTC.

Futures exchanges in the crypto market use a mechanism called “funding” to achieve market equilibrium. When the bulk of the market is buying bitcoin, buyers need to motivate short sellers. And vice versaWhen shorts make up most of the market, sellers have to pay buyers.

Before the November 10th crash, the BTC funding rate was over 0.01%. This suggested that the market wanted Bitcoin or bought what was oversaturated.

After the small correction to the support level of USD 15,000, BTC futures contracts were neutralized when the financing rates stabilize.

The volume of the Bitcoin futures market is stagnating as the market stabilizes. Source: Skew.com

Another test of $ 16,000 weakened the resistance

By the end of November 11, the $ 16,000 area was a strong resistance level for Bitcoin.. Traders noted the presence of large sell orders on the resistance, suggesting that the whales are likely targeting this level.

According to Edward Morra, a Bitcoin trader, There is an abundance of customer orders near $ 16,000. The said::

“Keeping up and up, I think that at least suggests its market cap as of November 6th, and we may have a ton of orders over $ 16,000 at Bitfinex.”

Despite filing large customer orders of $ 16,000 Bitcoin rose sharply over the past week due to repeated retests. The repeated tests weakened the resistance and caused the BTC to rise.

The $ 14,900 whale support zone held up perfectly

Cointelegraph consistently reported on it this week The $ 14,900 has become a support area for the whales.

Whalemap data shows that Whale groups are formed when wealthy individuals buy BTC and not move the BTC. This shows that the whales are congregating in a certain area, which is then considered a support level.

Bitcoin whales are stacking money in the $ 13,600, $ 13,740, $ 14,120, and $ 14,900 zones. Source: Whalemap

Despite extreme market volatility influenced by macro factors such as Pfizer’s vaccine development, Bitcoin was comfortably above $ 14,900. The trend has shown that it has become a stable level of support for BTC.

Cameron Winklevoss, the billionaire co-founder of the large Bitcoin exchange Gemini, stressed the importance of BTC staying above the USD 14,900-15,000 support area. Said::

“Bitcoin closed over $ 15,000 yesterday for the third time in a row. It is the first time in history that Bitcoin has held this price level in 72 hours. A new record. “

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