Bitcoin (BTC) price hit $ 19,000 on November 24 for the first time since its historic spike in December 2017. Three main reasons are the strong dynamics of the cryptocurrency.
The main factors behind the further rise in BTC are the accumulation of whales, declining supply from stock exchanges and explosive volume trends.
Whales continue to hoard Bitcoin
Cointelegraph reported on it in November Whale heaps were constantly forming as the price of Bitcoin rose.
These clusters arise when Bitcoin whales buy BTC at a certain price and don’t move it. Analysts have interpreted this as a sign of this The whales are massing and have no intention of selling in the short term.
The difference between the current Bitcoin surge and previous price cycles is that The recent upward trend has proven to be more sustainable. Actually, Each whale cluster shows that every major support level claimed by BTC has been accompanied by whale accumulation.
November 18th When Bitcoin fell to $ 17,200, Whalemap analysts said support for new whales was at $ 16,411. they said::
“The bubbles indicate the prices at which the whales bought the BTC that they currently hold. Bubbles also visualize support levels. The last time it rebounded from $ 15,762, its price rose 15%. Will the new bubble hold at $ 16,411 this time around? “
Since then, Bitcoin has seen a few more drops below $ 18,000 Since then, it has rebounded over $ 18,800 and maintained its strong momentum.
Furthermore, Data from Santiment, a platform for chain market research, shows a similar trend. Santiment researchers found that out BTC’s whale count has increased significantly in the past few months. They declared::
“The number of #bitcoin whales with 10,000 or more coins (currently $ 185 million or more) has risen to 114 in the past few days as prices surged above $ 18,000. Plus, the number of holders with at least 1,000 BTC ($ 18.5 million) has hit an ATH of 2,449! “
The supply of Bitcoin on the stock exchanges is running out
A consistent trend during the 2020 bull cycle was the continued decline in Bitcoin reserves on the exchanges.
Investors and whales deposit BTC on exchanges when they want to sell BTC. So, The recent decline in foreign exchange reserves means there are fewer sellers in the market.
A trader with the pseudonym “Byzantine General” said so Every time spot exchanges expand their BTC reserves, they run out. Said::
“Every time spot trading exchanges add $ BTC to their reserves, they are used up almost immediately. You do not understand? There is literally not enough offer. “
The volume increases
The volume of the institutional and spot exchanges has increased rapidly since September. Open interest in Bitcoin futures and options on CME was over $ 1 billion in November, and Binance’s BTC / USDT pair has consistently hit more than $ 1.5 billion in daily volume.
Various data points show this as well The spot market led the increase, not the derivatives or futures markets. This trend makes the rally more stable and reduces the risk of massive corrections.
If the futures market is the majority of the volume during a Bitcoin uptrend, there is a great risk of cascading sell-offs. This time the spot market led the rise and made it more sustainable.