Today, November 12, the price of Bitcoin (BTC) surpassed $ 16,000 for the first time in nearly three years. The dominant cryptocurrency gained momentum thanks to three main factors.
The main catalysts for BTC’s growth are the overheating of the derivatives market, a new test of the $ 16,000 and $ 14,900 whale supply area.
The recent downturn has reset the bitcoin derivatives market
On November 10, Bitcoin’s price suddenly dropped to $ 15,072. The market downturn came just 24 hours after the sharp drop to $ 14,805, which caused skepticism among traders.
But the fall was good for Bitcoin for two main reasons. First, it allowed the whales to capitalize on their trades around the $ 15,000 support level. Second, it neutralizes the futures market by driving out criminal buyers or long-term contract holders.
The futures market adjustment and funding rate for bitcoin futures were critical to sustaining the continued growth of bitcoin.
Futures exchanges in the cryptocurrency market use a mechanism called “financing” to balance the market. When most of the market is buying bitcoin, buyers need to incentivize card sellers. The converse is also true: when the majority of the market is short, sellers must pay buyers.
Before the November 10 drop, the BTC funding rate was above 0.01%. This indicates that the market has been looking forward to or has bought Bitcoin, making it crowded.
After a slight correction to the $ 15,000 support level, BTC futures were neutralized as funding rates stabilized.
The size of the bitcoin futures market decreases when the market stabilizes. Source: Skew.com
$ 16,000 renegotiation weakens resistance
Until the end of November 11, the $ 16,000 area was a high resistance level for Bitcoin. Traders have issued large sell resistance orders, indicating that whales are likely to target this level.
According to Edward Moore, a bitcoin trader, the number of sell orders is approaching $ 16,000. He said:
“When I go higher, I think it will peak at least on November 6, and maybe higher. We have many orders over $ 16,000 on Bitfinex. ”
Despite placing large sell orders of $ 16,000, Bitcoin fell due to repeated tests last week, ultimately easing resistance.
The $ 14,900 Whale Support Area is fully preserved.
Cointelegraph consistently reported this week that $ 14,900 has become a support zone for whales.
Data from whale charts show that whale populations form when individual valuables buy BTC rather than move them. Then the price is considered since the purchasing group is made as a support level.
Bitcoin whale collections are priced at $ 13,600, $ 13,740, $ 14,120 and $ 14,900. Source: Map of whales.
Despite the high market volatility, influenced by macroeconomic factors such as the development of the Pfizer vaccine, Bitcoin is firmly holding above $ 14,900. The trend showed that it has become a steady support level for BTC.
Cameron Winklevoss, billionaire co-founder of the largest bitcoin exchange company Gemini, highlighted the importance of the BTC contract in the support range of $ 14,900 to $ 15,000. He said:
“Bitcoin closed above $ 15,000 yesterday for the third day in a row. This is the first time in history that Bitcoin has held this price level for 72 hours. New record”.