Bitcoin (BTC) price was above $ 13,745 and is now well on its way to the next major resistance level. Traders have indicated that $ 13,875 is the next major short-term area for BTC for two reasons.
First, Bitcoin hit a high of $ 13,970 on June 26, 2019. Technically, the high reached over a year ago is still an important area for sellers.
Secondly, Technical analysts say Bitcoin’s weekly candlestick chart signals that $ 13,875 is the next “logical resistance”.
The most important factor will be how Bitcoin price reacts after reaching a long-awaited resistance level and its near-term performance is expected to improve by the end of this year.
Should investors expect a big pullback near the $ 14,000 level?
In the last days Predictions of a major Bitcoin retreat have risen as market sentiment turns euphoric.
Historically, even amid great bull cycles, Bitcoin saw healthy corrections that further fueled its uptrend.
Edward Morra, A well-known cryptocurrency trader expects a market reaction at $ 13,875. When BTC last hit this level 16 months ago, the price dropped in a short amount of time.
This time, traders do not expect such a sharp decline. However, you expect a strong reaction from BTC and the market in general. Morra He said::
“On the longer timeframe chart, that weekly level of $ 13,875 is the next logical resistance. It strongly opposed the 2019 rally, the second test will be less violent but I think there will be a reaction. It’s something to look out for when keeping the 19 weekly offer high. “
Last week, Bitcoin tested many important resistance levels in a short period of time. However, it slightly exceeded these values. Consolidate above each and show a stable increase.
For buyers, The ideal scenario for Bitcoin would be to break above the $ 13,875 level and stay stable above it. Such a pattern would indicate a healthy rebound from multi-year resistance levels, which is very optimistic.
Additional factors for the dynamics of Bitcoin
There are two fundamental and macroeconomic factors that could catalyze Bitcoin’s momentum in the short term: Decoupling with the US stock market and idling.
How he showed the bitcoin investor, James O’Beirne, BTC, convincingly decoupled from the US stock market in October.
Due to the lack of a stimulus package, the uncertainty surrounding the 2020 election, and the surge in COVID-19 cases, the US stock market has steadily fallen. At the same time, Bitcoin has rallied strongly and sentiment regarding the leading digital asset has improved significantly.
according to CoinMetrics, Bitcoin’s dormant offering for at least a year, hit a new all-time high. Researcher they said::
“The percentage of BTC supply that was sustained for at least a year has never been higher. This is bullish for BTC, especially given the fact that this metric historically peaked during times when the price was at local lows. “
The convergence of fundamentals, macro and positive technical factors coupled with an optimistic technical structure with a longer timeframe increases the likelihood that Bitcoin will hit $ 13,875 without experiencing a massive correction.