Bitcoin (BTC) traders identify the order books of the major exchanges, showing that the $ 19,500 level is a short-term resistance level.
Bitcoin rejects $ 19,500 for now
November 25th The Bitcoin price was rejected on the major spot exchanges at $ 19,500 with relatively large volumes. For example, on Binance, the price of BTC hit $ 19,484 before falling slightly to less than $ 19,300.
The lower rejection was likely due to stacks of sell orders between $ 19,450 and $ 19,550.
A popular trader named “Byzantine General” shared the order books of all major exchanges with $ 19,500 as a key area for sellers.
– Byzantine General (@ByzGeneral) November 25, 2020
Vijay Boyapati, a Bitcoin researcher, also said the range of $ 19,500 to $ 19,550 remains the last wall of sales before an all-time high.
Let’s go. After this baby wall, most previous highs of all time are removed very quickly pic.twitter.com/7E0gmgdgpD
– Vijay Boyapati (@real_vijay) November 25, 2020
If Bitcoin doesn’t retest the $ 19,500 area in the next few hours, it could mean another decline is likely. Given that this would be the last stand before the new all-time high, traders are expecting some reaction from sellers.
Another small pullback would benefit Bitcoin as it would further neutralize the futures funding rate. The refinancing rate for BTC futures has risen again to 0.07% on Binance futures and other exchanges.
Given Bitcoin’s average funding rate of 0.01%, another short-term decline to reset the derivatives market could actually add to the upward momentum.
Short contracts at a level not seen since April are a relevant variable
But still, One variable to consider is that the number of short contracts in the Bitcoin market is at its highest level since April 2020.
In March, the price of Bitcoin fell below $ 3,600. It then continued to rise and eventually topped $ 19,000. The rally accelerated in April when short contracts hit an annual high.
The likelihood of a short bearish contraction increases as the number of short contracts in the market increases. A small bearish contraction occurs when the price of an asset continues to rise despite significant selling pressure.
This trend causes short sellers to buy their positions in the market, resulting in increased demand for purchases in the market. An analyst named “Cactus” wrote::
“BTC short contracts have reached their highest level since April 2020 …”
If the number of short positions continued to increase, it would also lead to a decline in the futures funding rate. In a way, this could make the rally more sustainable in the medium term.