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Bitcoin (BTC) traders are spotting the order books of major exchanges showing that the $ 19,500 level is a short-term resistance level.
Bitcoin rejects $ 19,500 per hour
On November 25, Bitcoin’s price was declined at $ 19,500 with relatively high volume in peak trading. On Binance, for example, the price of BTC reached $ 19,484 before seeing a slight drop to $ 19,300.
The minor rejection likely occurred due to stacks of sell orders between $ 19,450 and $ 19,550.
A popular pseudonym trader known as “Byzantine General” shared order records from all major exchanges showing $ 19,500 as a key area for sellers.
All eyes on the 19500.$ BTC pic.twitter.com/fJWpyAnTcv
– Byzantine General (@ByzGeneral) November 25, 2020
Vijay Boyapati, a Bitcoin researcher, similarly stated that the $ 19,500– $ 19,550 range remains the last selling wall before a new all-time high.
Let’s gooooo. After this baby wall, most of the previous trades will be cleared very quickly pic.twitter.com/7E0gmgdgpD
– Vijay Boyapati (real_vijay) November 25, 2020
If Bitcoin doesn’t test the $ 19,500 area again in the next few hours, that could mean another drop is likely. Considering that it would be the last resistance until the new all-time high, traders expect some reaction from the sellers.
Another small pullback would benefit Bitcoin as it would further neutralize the futures funding rate. The funding rate of BTC futures has once again increased to 0.07% on Binance Futures and other exchanges.
Considering that Bitcoin’s average funding rate is 0.01%, another short-term decline to restore the derivatives market could even strengthen the upward momentum.
The fact that the shorts are at levels not seen since April is a variable
However, one variable to consider is that the number of shorts in the Bitcoin market is at its highest since April.
In March, the Bitcoin price dropped below $ 3,600. Subsequently, it continued to rise, eventually topping $ 19,000. The rally accelerated in April when short contracts reached their annual high.
The probability of a short squeeze increases as the number of short contracts in the market increases. A short squeeze occurs when the price of an asset continues to rise despite the presence of significant selling pressure.
This trend causes short sellers to buy their positions in the market, fueling greater buying demand in the market. A pseudonymous analyst known as “Cactus” he wrote:
“$ BTC shorts are at their highest since April 2020 …”
If the number of shorts continues to increase, it would also cause the futures funding rate to drop. In some ways, this could make the rally more sustainable in the medium term.
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