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There are both bearish and bullish scenarios for Bitcoin in the near future. Bear cases surround two key data points: the rise in BTC deposits from whales to exchanges and the lack of BTC repeats of crucial support levels. The upside cases are based on HODLer activity, address activity, the market cap gap between BTC and gold, and Bitcoin’s favorable technical structure.
Bitcoin exceeding $ 18,500 is critical to its short-term price cycle. There were large sell orders right above $ 18,500, which acted as a strong resistance area. In previous attempts to break above $ 18,500, BTC has dropped substantially in a short period. This time it broke through the resistance level with ease, marking a sharp breakout.
The case of the bear for Bitcoin
Despite BTC’s technically strong upward trend, whale data indicates that selling pressure on Bitcoin may intensify. Cole Garner, an on-chain analyst, cited CryptoQuant’s Bitcoin Exchange Whale Ratio to to say: “It is likely that another leg was left in the tank with a puff.” The price of Bitcoin saw a skyrocket on November 18 when it dropped sharply from $ 18,476 to $ 17,214 in two hours. Garner pointed out that the Bitcoin Exchange Whale Ratio has a “top story here”.
The price of Bitcoin (BTC) has stabilized above $ 18,000 as the market shows strong momentum above what was once a heavy multi-year resistance level. On November 20, the price of BTC reached a new two-year high at $ 18,828 on Binance, surpassing the previous high of November 18. After Bitcoin’s breakout, analysts are divided on its future price trend.
The Bitcoin Exchange Whale report is an important metric for measuring the selling pressure of whales because it shows the estimate of the amount of BTC that high net worth investors deposit in exchanges. Typically, investors move funds to exchanges when they want to sell. Investors with high net worth prefer to keep their funds in unsecured portfolios that they fully control. Therefore, analysts track currency deposits as a potential sell off signal.
On top of the whale data signaling a slight pullback, the monthly Bitcoin chart shows excessive upward price movement. Sasha Fleyshman, trader at institutional cryptocurrency investment firm Arca, She said on November 1 that the $ 13,716 level is a crucial area. It marked the opening and closing candlestick prices of December 2017 and January 2018, when the price of Bitcoin hit a new all-time high at nearly $ 20,000. So, breaking through that level means $ 13,716 will serve as the primary macro support area.
Although unlikely, if a deep correction occurs, Fleyshman said he expects the “palpable” support level at $ 13,716 “to be the line in sand support wise to maintain structure.” It still remains uncertain whether BTC will see a major correction in the near term. But in the case of a correction, Fleyshman said BTC has a large support area to defend the ongoing bull run.
Denis Vinokourov, head of research at cryptocurrency exchange and broker BeQuant, told Cointelegraph that price drops similar to the recent sudden slump have occurred earlier and the recent drop was met with significant demand from buyers. So, although BTC has seen a major bearish move in a short time, it believes it is not necessarily bearish:
“Bitcoin’s unstoppable rise has come to what some may have misinterpreted as a sudden end. However, while the swing in price from $ 18,500 to $ 17,200 is certainly not for the faint of heart, similar price swings in dollar terms occurred when Bitcoin was trading at a much lower valuation. In addition to that, the selling pressure has been met with an equally aggressive drop in buying interest and what’s more is that aggregate open options (OI) interest is actually higher from the lowest initial drop. “
The bullish case for BTC
Due to Bitcoin’s breakout above $ 18,500, analysts said market sentiment around Bitcoin is generally upbeat. Speaking with Cointelegraph, Guy Hirsch, eToro’s US chief executive, said it would be surprising to see Bitcoin fail to challenge the all-time high anytime soon. There are many positive narratives – such as support for BTC from PayPal and the Cash App, along with growing institutional adoption – that illuminate the prospects for Bitcoin:
“The sentiment is now quite bullish and a number of indicators, including social media chatter, trading volumes and even web pages indexing marketing terms related to Bitcoin, are at or close to all-time highs themselves – these there are clear indicators that the appetite for an extended bull run is here; and the growing adoption coming from all sides: PayPal and CashApp, Anthony Scaramucci’s Skybridge announcing plans to buy Bitcoin, and many legendary investors too. “
While there have been discussions about Bitcoin’s time frame charts, such as the weekly and monthly charts throughout November, technical analysts have said that the lower time frame charts also look optimistic. Before Bitcoin’s breakout above $ 18,500, a pseudonymous trader known as “Benjamin Blunts” claimed that BTC left a side structure that had formed in the previous 48 hours. After the breakout, the trader She said this rally “should be what will take us to $ 20,000 and return to all-time highs”.
In addition to the numerous technical and fundamental catalysts for Bitcoin, there is a strong argument to support an exponential growth trajectory for BTC over the long term. Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, She said that with a market cap of only $ 300 billion, Bitcoin is far from reaching the market cap of $ 10 trillion of gold. But this also shows that there is a large valuation gap between Bitcoin and gold: “Bitcoin is on track to be a digital version of #gold, but remains far from it in 2020”.
The next ceiling for BTC?
Considering the various trends Bitcoin has seen in the eight months since the March crash, Hirsch told Cointelegraph that there is a high probability that Bitcoin will test $ 25,000. If Bitcoin goes above $ 20,000, it would mean BTC will try to explore a new ceiling. Hirsch identified the maximum potential for Bitcoin in the short term in the $ 25,000– $ 30,000 range:
“If Bitcoin were to exceed $ 20,000, there is little to suggest that we would not take a run to $ 25,000 before the end of the year. Even if I would avoid planting a flag in the ground and making a price prediction per se, the fundamentals behind the number of people who now have access to Bitcoin through apps like PayPal and can buy it with very few barriers to entry, suggest that even if a fraction of those people do, the price can only go up. “
However, when Bitcoin surpasses $ 20,000, there is no longer any historical context to predict BTC’s next move. Hence, above the current all-time high, it is almost impossible to predict the next BTC high until it reaches a certain level. Another variable is that retail investors are likely to enter after BTC passes $ 20,000, which would add to the high level of interest and fear of losing, or FOMO, that the cryptocurrency market is already seeing.
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