The $ 21,000 level was particularly important for Bitcoin to continue its rally in the near term. The heat exchange charts showed sell orders stacked from around $ 21,000 to $ 21,500, meaning the BTC price had to move to see a broader uptrend.
Bitcoin enters price discovery
Trade heat maps show no visible resistance levels and areas with large sell orders above $ 22,000. In the short term, this means that the likelihood of BTC continuing its rally is high.
Due to bullish market sentiment and the slump on the sales side, Woo said the BTC Top Cap pattern shows $ 100,000 to be a “ridiculously low target.” he he told me:
“We are not at an all-time high where the BTC Top Cap pattern is starting to curve upward. Let’s see how high she runs in 2021. $ 100,000 is a ridiculously low target on the current trajectory. $ 55k is the next milestone -> Bitcoin becomes a bucket of macro assets of $ 1T. “
Woo pointed out $ 55,000 as the step price for Bitcoin, as that would mean that BTC would have reached 10% of the market cap for gold.
Currently, the valuation of gold is estimated at around $ 9 trillion. Above $ 50,000, Bitcoin would start to absorb a relatively large part of the market cap of gold, which remains the dominant safe-haven asset.
Exchange order books and volume trends also show traders have increased their sell orders, expecting Bitcoin to hit $ 30,000 after $ 20,000 was finally breached yesterday.
If the momentum in futures, options and spot markets holds throughout the next few days, the likelihood of BTC hitting $ 30,000 as the first local high remains high.
Options market data shows institutions remain bullish
According to Deribit Insights, the research arm of the largest cryptocurrency options exchange, institutional funds remain bullish on Bitcoin.
In the options market, call options represent buy orders and put options refer to sell orders. Therefore, when buyers of call spreads increase, it shows that expectations of a larger Bitcoin rally are increasing.
Deribit Insights said the exchange spotted big buyers of call spreads, indicating a bullish bias. They he told me:
“Institutional funds seem to remain optimistic. Big Buyers of Call Spreads (Popular 20-24k before Broken 20k). Today Jan + Feb 22k Calls both bought x250. Jan 30k x500 displayed as purchase. Profit close to calls, some roll in January + February, keep the exposure. ATM 19.5–20k Puts sold – Bullish bias. “
However, for the foreseeable future, influxes of whales pose a threat to Bitcoin. CryptoQuant data suggests that whale deposits in exchanges have reached levels not seen since March 2020.
$ BTC The average inflow of all exchanges (end of day) hit its highest level in nine months since the great liquidation in March.
See the graphic https://t.co/kLek1Plpuo pic.twitter.com/kgff0fdW06
– CryptoQuant.com (@cryptoquant_com) December 17, 2020
Since Bitcoin has rallied despite the increase in whale deposits, BTC may still see a sustainable rally towards $ 30,000 as institutional buying is only just starting to gain momentum.