The price of Bitcoin (BTC) hit a new annual high of USD 16,717 at Binance. After the breakout, traders expect a bigger rally in the near future.
There are several reasons why analysts expect the upward trend to continue. First, Bitcoin broke cleanly from $ 16,000, hitting its November 13 high of $ 16,473. Second, a sell-side crisis is brewing as more BTC is being accumulated than it is being mined. Third, BTC rebounded despite indicators showing overbought signals.
Top analysts were wrong about a Bitcoin correction
John Bollinger, a veteran trader and inventor of the Bollinger Bands indicator, said today that he was wrong about a bitcoin correction.
On November 10, Bollinger said Bitcoin was showing a “short-term guideline pattern”. At the time, Bollinger was unsure whether this would lead to a correction or a consolidation, but he expected the market to cool.
A number of analysts were expecting Bitcoin to plummet, particularly just before the weekly candlestick close. Still, BTC continuously recovered and saw increasing momentum. Bolinger said:
“Looks like I was wrong about the possibility of a fix. We just have a little consolidation and then back to the races. $ btcusd Broken setups like this one are a sign of strength, so the path of least resistance is higher right now. #BTC ”
Derivatives traders have also pointed out the declining supply of Bitcoin, leading to a sell-side crisis. This trend could cause BTC to rebound even if key levels of support are tested.
A pseudonymous futures and options trader named “Light” said around 3,000 BTC has been withdrawn every day since BTC hit $ 10,000. This trend shows that the demand for Bitcoin is high and miners are refusing to sell BTC, which is optimistic for BTC. The dealer said:
“Now at $ 16,600 down from $ 11,000. Since the $ 10,000 break, ~ 3000 BTC net has been withdrawn from major central BTC exchanges EVERY DAY … miners are refusing to sell their recently halved rewards in the face of demand and are well above breakeven. “
BTC price is responding positively to today’s vaccine breakthrough
When Pfizer announced a highly effective vaccine against the coronavirus on November 12, the price of Bitcoin plummeted nearly 3% in a matter of hours.
This time around, Bitcoin is actually up nearly 5% following the release of Moderna’s highly anticipated vaccine results. During the same period, gold struggled and only gained 0.17%.
But traders say that if Bitcoin falls as it did on November 12th, it would provide a dip buying opportunity. A popular crypto trader named “Hsaka” said:
“The last time we had vaccination news, $ BTC followed the Stonks on the first climb, but ultimately succumbed to the gold that slipped down. Well worth buying when history repeats itself and the opportunity presents itself. “
The combination of technical dynamics, a sell-side crisis, and the sheer dynamism of the rally results in BTC remaining stable above $ 16,000. Given that BTC has not declined quickly after its rebound, there is a strong case that $ 16,000 will become a reliable area of support.