Bitcoin (BTC) surpassed the $ 16,000 mark relatively easily on November 13 and remained elastic. Analysts are divided over the short-term outlook for Bitcoin, as progress remains significant, but there are concerns about a sharp rise. However, there are several positive developments that could continue to support the bullish trend in BTC.
In general, the cryptocurrency market has seen an increase in trading activity on all types of exchanges. The spot markets, derivatives markets and institutional markets have seen significant increases in investor demand. Speaking to Cointelegraph, Denis Vinokurov, head of research at Cryptocurrency Exchange and Bequant, said the overall growth in trading volume is positive:
Considering the volume of retail-focused cryptocurrency trading, it looks like interest among these market participants has increased significantly. However, at the same time, trading volume and open interest rates (OI) are increasing in more regulated countries, especially the Chicago Board of Trade. ”
The massive increase in trading volume in the cryptocurrency market was a decisive catalyst for Bitcoin during the recent rally. Market analysis platforms in various chains, such as CryptoQuant, report a large number of whales. This means that high net worth investors have been selling bitcoin more and more in the past week as the price was in excess of $ 16,000. However, the dominant cryptocurrency managed to maintain its momentum, climbing to $ 16,480 on November 13.
Overall, the increase in trading volume and the steady flow of currencies on the stock exchanges means that the demand for bitcoin is growing. Thus, there is a strong possibility that the main driver of BTC’s growth above $ 16,000 will be high trading activity and the recent growing appetite for bitcoins due to stable currency flows. After a spike of over $ 16,000, analysts were generally bullish, especially regarding BTC’s long-term trend. However, some fear the immediate effects.
Bitcoin bullish scenario in the short term
Throughout history, bitcoin has been worth over $ 16,300 for 12 days. Looking at the data in the series, IntoTheBlock analysts noted that there was little resistance between $ 16,300 and $ 18,750. If BTC rises to $ 18,750 in the short term, it will leave a small gap to a new full high of over $ 20,000.
In the short term, based on market demand and chain levels, analysts believe the $ 15,170 area is likely to become a new support area. The company found that 860,000 addresses bought 465,000 BTC close to this level, which would mark this as important support. This means that if BTC stays comfortably above $ 15,170, it should solidify the foundation for the next rally. But if it falls below that level, there is the possibility of a deep decline.
While chain and technical factors are fueling Bitcoin’s jump, traders have raised their concerns as well. More than $ 16,000 is the road to a new Major League record. Thus, traders expect sellers to try to hold the price around $ 16,000, triggering a consolidation phase.
But technical analysts say Bitcoin’s speed may simply be too fast to see a sharp reversal. Cryptowatch cartographer Kevin Swenson said buyers with FOMO – fear of missing out – may have taken over the market. BTC is increasing its bullish momentum, especially when it continues to climb the ladder.
Swenson suggested that BTC could be rejected in the future. However, the analyst said that BTC could reach $ 17-18,000 before withdrawal is made: “#Bitcoin is moving up. FOMO buyers dominated the market … remember. We can get into a zone of “excess abundance” … expect rejection to crush FOMO buyers. ”
Other traders also said that the November 12 drop in bitcoin prices to below $ 15,500 could have been a “bad luck.” After reaching $ 15,965, BTC suddenly dropped by almost 4% to $ 15,440. After the withdrawal, BTC returned to $ 16,000 and then continued to clearly overcome the terrible resistance level. Based on this price movement, a trader under the pseudonym “Loma” said that a significant reversal is likely in the short term. “I don’t think it makes sense to test the space again for $ 15,800,” the trader said.
The state of bears in the short term
Bitcoin’s short-term bearish scenario is still based on positive market sentiment. Analysts still expect Bitcoin to accumulate towards the end of the year, but in the short term, they are predicting failure because Bitcoin has historically corrected during its long upward cycles. For example, in 2017, when BTC increased by almost $ 20,000, it regularly fell by 20-30%.