3 reasons why the price of Bitcoin violently rejected nearly $ 20,000

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Bitcoin (BTC) eventually managed to hit a new high, but the digital asset strongly rejected nearly $ 20,000. Chain analysts say the sale of whales and miners, combined with the $ 20,000 level acting as a resistance level, caused a sharp drop.

BTC / USD chart in 15 minutes. Source: TradingView

What prompted whales and miners to sell Bitcoin?

For whales and high net worth investors, liquidity is the most important factor. Since they are dealing with large orders, they need to calculate the slippage their sell orders will cause.

Typically, the best time to sell whales is when there is a peak of euphoria in the market and high demand from buyers. This allows whales to sell their holdings more efficiently without causing massive volatility.

When the price of Bitcoin officially broke its all-time high on Coinbase, this made the market sentiment very optimistic. Soon after, the whales began to sell, causing large liquidations on the major exchanges.

CryptoQuant CEO Ki Young Ju explained that whale withdrawals were slowing on November 30.

“I called short term bearish based on selling miners, whale activity on trade and no whale withdrawals. But I knew that enough stable foreign exchange reserves would break $ 20,000 by this year. If the ATH rejection occurs, it could be a huge setback as the whales would sell BTC heavily. “

The confluence of whales keeping BTC on the exchanges, meaning higher selling pressure, and the selling of miners amplified the BTC slowdown.

Ki also noted that the whales have started depositing Bitcoins in exchanges again, which happens when the whales want to sell their holdings.

Is the current recovery just a dead cat rebound?

The price of BTC recovered quickly after falling to around $ 18,200, climbing back above $ 19,400 within hours.

The rapid recovery likely occurred due to the nature of the fall. As the price fell, the exchanges saw long, cascading selloffs. As such, BTC has likely fallen harder than it should have without the big selloffs.

The recovery has been equally intense on the upside for this reason. Late short sellers could have turned aggressive when BTC fell, causing short-term short-term compression.

In the short term, Bitcoin could see two major scenarios. First, it could consolidate above $ 19,000, which would allow the derivatives market to regain its composure and open interest to rebuild.

Second, BTC could continue to fall as traders anticipate a high after hitting a record high.

But the macroeconomic outlook for Bitcoin is still very optimistic. Scott Melker, a cryptocurrency trader, pointed out that the November monthly candle is closing at the all-time high for BTC, which paints a positive long-term picture for BTC. he he told me:

“Last month ended just at the previous highest monthly close of all time. This month ended at an all-time high. Really flawless chart. “

In the near term, key support levels for Bitcoin are $ 18,200, $ 17,700, and $ 16,200. There are still large clusters of whales in these areas, which could cause a reaction from buyers.



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