Bitcoin

4 reasons why the price of Bitcoin will hit a new all-time high

In the early hours of today Bitcoin (BTC) price hit $ 18,815 on Binance for the first time in nearly three years. After this breakout, BTC is on track to hit a new short-term all-time high for four very important reasons.

The factors that enable a new maximum are Growing institutional demand, easing selling pressure, a spot market-driven rally, and the significance of the breakout of the $ 18,500 resistance.

BTC / USD 4 hour chart. Source: TradingView.com

Bitcoin is under less pressure to sell

In order for Bitcoin holders to sell, they must first deposit BTC with exchanges. Often times, when an exchange’s BTC reserves drop, it indicates that there is less selling pressure in the market.

4 reasons why the price of Bitcoin will hit a new all-time high
4 reasons why the price of Bitcoin will hit a new all-time high

according to Data from Glassnode, Bitcoin’s previous inventory decreased by 18%. That’s what analysts at the on-chain market analysis firm said BTC’s liquidity continues its downward trend.

This trend is significant because it shows that There is hardly any appetite to sell Bitcoin at the current price level despite its rally from $ 3,600 to $ 18,700 in eight months.

BTC balance held on exchanges. Source: Glassnode

The institutional demand is increasing

After BlackRock Fixed Income’s CIO Rick Reider spoke about Bitcoin on CNBC, the billionaire investor Mike Novogratz said that BTC is now an institutional asset.

During the interview on CNBC, Reider said that Bitcoin is staying here and has the potential to move forward. He suggested that millennials prefer BTC and that reinforcing the reality that digital currencies are becoming popular payment options are two major positive factors for BTC.

Given institutional trends, Novogratz said 2021 would likely be as good or better for Bitcoin than 2020. Said::

“Bitcoin is now an institutional asset. Point. The good news is that most of the institutions have not yet entered. So 2021 will be as good or better than 2020. “

The local market is strengthened on the sales side during the crisis

On October 10, this was said by a cryptocurrency derivative trader named “Light” Bitcoin is showing signs of a liquidity crisis on the sell side. He showed on this occasion:

“On the sales side, Bitcoin is experiencing the beginning of a liquidity crisis. It’s always been like oil on drugs. Production is completely inflexible while demand is flexible. “

Bitcoin’s performance over the past two quarters showed a clear lack of sellers in the market. Especially after the halving in May, the decline in selling pressure on BTC is positive.

In addition to the decline in sellers, crypto derivatives traders, “Cantering Clark” noted that the spot market leads the rest of the market. Said::

“The cash offer takes the lead.”

The spot market, which leads the derivatives market, is important as the latter allows traders to use high leverage. When the futures market leads an upward cycle, the uptrend becomes vulnerable to large price fluctuations.

It’s important to keep $ 18,000 as support

November 18th Bitcoin fell from $ 18,500 to around $ 17,200 minutes after hitting a two-year high.

The heavy rejection of the day indicated that large volumes of sell orders over $ 18,500 had been submitted. The second breakout above $ 18,500 today confirms that the market has enough momentum to break through key multi-year resistance levels and turn them into support.

Based on the combination of these four factors and the fact that the central bank’s policy of continuous liquidity can increase inflation, The likelihood that BTC will hit a new all-time high anytime soon remains high.

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