2020-12-17 16:53 |
The Bitcoin price (BTC) has achieved $20,800 across major exchanges despite whales in Asia selling aggressively. On-chain analysts said that the $18,500 to $19,500 was a “no trading zone” until whale inflows subside.
Ki Young Ju, the CEO of CryptoQuant, said:
“For me, 18.5k-19.5k is no trading zone. $BTC will break $20k this year eventually, but I’m just normal long(1x) here since lots of fake-outs due to whales. Will punt another generation(10x) long when the market is silent — fewer exchange inflows and less trading volume.”
There are two key reasons why analysts were cautious about Bitcoin as it struggled to break out of $19,600. First, the high number of BTC deposits into exchanges by whales suggested high selling pressure in the market. Second, the $19,600 level was a heavy resistance area.
The Bitcoin price chart with key levels. Source: Bitcoin Jack, BTCUSD on TradingView.com This key level had to break with strong volume for the Bitcoin rally continuationThe $19,600 resistance level had continued to reject due to the selling pressure from whales.
Particularly, whales in Asia consistently sold large amounts of BTC as it gets closer to the resistance.
For Bitcoin to see a broader rally in the near term, it needed to break out of $19,600 with strong volume and remain above it. On December 16, BTC finally broke out of it, reaching $20,800.
In the short term, this means that miners and whales would have to sell fewer Bitcoin to reduce the pressure on the market.
For now, there are little signs of a whale-induced sell-off occurring again in the foreseeable future. Whale inflows and the whale reserves on exchanges have declined.
A pseudonymous trader known as “Bitcoin Jack, who called the Bitcoin bottom at $4,000 and called the rally until $19,000, said the market is currently cautious. Above it, however, the trader said its bullish.
The Bitcoin price would need to surpass $19,600 to invalidate the caution, the trader said:
“Market keeps flip flopping around this level, failing to breakout with a clean swing failure pattern Notion of caution is warranted – clear 19.6 would invalidate that caution.”
What does this mean for the market?There was significant uncertainty around the short-term price cycle of Bitcoin. Until BTC broke $19,600 with strong volume, the lack of clarity around BTC remained.
If this trend continues, it could have a negative impact on large market cap altcoins.
Altcoins typically mimic the price trend of Bitcoin with intensified movements to both the upside and downside.
Hence, when Bitcoin rises, altcoins rally strongly, but when BTC falls, they see a sharp pullback.
The problem for altcoins is that when Bitcoin stays within a tight range, it sees large downside movements but limited uptrends. But when BTC is moving rapidly, altcoins could fall.
As CryptoSlate previously reported, technical analysts expect altcoins, like Ethereum, to outperform Bitcoin in the next bull cycle.
The post Why Bitcoin escaping $18.5k to $19.5k “no trading zone” is highly optimistic appeared first on CryptoSlate.
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