The price of Bitcoin (BTC) relatively easily exceeded $ 16,000 on November 13 and remained stable above it. Analysts disagree on the near-term outlook for BTC as momentum remains strong but concerns about an overheated rally. However, there are numerous positive developments that could continue BTC’s upward trend.
In general, the cryptocurrency market is Trading activity has increased on all types of exchanges. The cash, derivatives and institutional markets saw significant increases in investor demand. Speaking to Cointelegraph, Denis Vinokourov, head of research at the stock exchange and cryptocurrency broker Bequant, said the increase in trading volume is positive overall:
“A look at the trading volume on the cryptocurrency portals, which are focused on retail, shows that the interest of these market participants has increased significantly. At the same time, however, the volume and open interest (OI, for its acronym in English) are the strongest regulated places and especially in the CME has also seen a steady increase. “
The significant increase in trading volume in the cryptocurrency market has been a fundamental catalyst for Bitcoin during the recent rally. Have on-chain market analysis platforms like CryptoQuant informed of large numbers of whales. This means that high net worth investors have been selling more and more BTC over the past week as the price topped $ 16,000. Nevertheless, the dominant cryptocurrency was able to maintain its momentum, rising to USD 16,480 on November 13th.
A sharp increase in trading volume and a steady flow Stable coins on exchanges usually mean that the demand for Bitcoin is increasing. So, There is a strong possibility that the main driver behind the $ 16,000 BTC rally was the high trading volume and renewed appetite for BTC demonstrated by stable inflows of coins. After the breakout above $ 16,000, analysts are generally bullish, particularly on BTC’s medium-term trend. However, some remain cautious about the immediate effects.
The short-term bullish scenario for Bitcoin
Bitcoin’s price has only been over $ 16,300 for 12 days in its entire history. Viewing the string data, IntoTheBlock analysts You noticed that there is little resistance between $ 16,300 and $ 18,750. If BTC rises to $ 18,750 in the short term, it would leave a small gap to a new all-time high above $ 20,000.
Short term, based on market orders and on-chain levels, analysts they said that the area of $ 15,170 would likely emerge as a new support area. The company noted that 860,000 addresses bought 465,000 BTC near that level, which would mark it as critical support. This means that if BTC is comfortably holding above $ 15,170 it would strengthen the foundation for the next rally. However, if it falls below the mark, there is a chance of a deep pullback.
While technical and chain-related factors are favoring an overstretched Bitcoin rally, traders have also raised concerns. Over $ 16,000, the path to a new record is very easy. Hence, traders expect sellers to try to suppress the price by $ 16,000, which will lead to a period of consolidation.
However, technical analysts claim that Bitcoin’s momentum might just be too strong to see a sharp pullback. Kevin Svenson, a Cryptowatch chartist, said that FOMO buyers – the fear of being left out – could have taken over the market. BTC’s upward momentum is building, largely due to the ongoing rally in the ladder.
Svenson noted that BTC could see a rejection in the future. Still, the analyst said BTC could hit $ 17,000-18,000 before a pullback occurs: “#Bitcoin is floating. FOMO buyers have taken over the market … remember that. We may be entering an area of ”excessive exuberance” … awaiting renewed pressure to crush FOMO buyers.“”
Other traders have similarly said that the drop Bitcoin saw below $ 15,500 on Nov. 12 may have been “the crash”. After BTC hit $ 15,965, it suddenly fell nearly 4% to $ 15,440. After the downtrend, BTC returned to $ 16,000 and then cleanly broke the dreaded resistance level. Based on this price move, a pseudonymous trader named “Loma” said a big pullback was likely in the short term. The dealer he showed: “I think that was the downfall. I don’t think it makes sense to retest the $ 15,800 area“.
The short term bearish fall
The short-term bearish scenario for Bitcoin continues to revolve around positive market sentiment. Analysts continue to expect BTC to rebound towards the end of the year, but expect a decline in the short term as BTC has seen corrections in the past over lengthy bull cycles. For example, in 2017, when BTC rose to $ 20,000, there were regular rejections of 20% to 30%.
Michaël van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that Bitcoin is in the “phase of disbelief”. Short sellers and skeptics are increasingly turning against BTC as it nears its all-time high. However, Poppe indicated the likelihood of corrections of 20% to 30% during the uptrend. When these setbacks occur, they could be great opportunities, explained:
“I agree with the statement that we are in the phase of disbelief. It is also difficult to say otherwise when $ BTC is only 20% away from a new all-time high. Regardless, a correction of 20-30% is possible. so great. Opportunity to buy relatively ‘cheap’ $ BTC. Take it. “
Josh Olszewicz, technical analyst at Bitcoin, pointed to the Ichimoku cloud indicator for Point that BTC is way above the cloud. This indicates that BTC is likely overbought and has rallied well beyond its support levels on the higher timeframe charts. The analyst said the $ 13,200 level would remain an area of interest to buyers.
No short contracts?
One variable of the Bitcoin price development in the near future is the unusually low number of short contract transactions. For example, When BTC topped $ 16,000 on November 13, Bitfinex and BitMEX only recorded about $ 13 million in short liquidations. Binance Futures and other exchanges also saw relatively little short liquidations compared to previous cycles.
Vinokourov believes weak short liquidations could mean the Bitcoin market is in a healthier position. This means that short selling is not the main catalyst for the BTC rally. Rather, real spot market demand and institutional appetite could cause the price of Bitcoin to rise. When the market is less dependent on the futures market, which supports high leverage, BTC is less prone to spikes in downward volatility, as noted by Vinokourov:
“Interestingly, there was a lack of brief liquidations, and there is a compelling reason for it – the overall OI may be at an all-time high, but the larger increase is actually being driven by margined stablecoin futures as opposed to with Bitcoin Margin. Because of the exposure mentioned above there is no exposure to bitcoin in stable coins and as a result the market is in a much healthier state than it would have been had the switch to stable bitcoin margin products not done “.
The combination of Bitcoin’s decreasing reliance on the derivatives market, the sharp breakout of the $ 16,000 resistance level, and multiple on-chain data points confirming $ 15,170 as a major support level for BTC increases the likelihood of a rally. wider. At the same time, given BTC’s historical trends to see large pullbacks even on parabolic rallies, traders are preparing for potentially sharp declines to buy the slump. However, the medium-term outlook for BTC remains positive, especially towards the end of the year.