Bitcoin (BTC) merchants are pinpointing the order books of main exchanges that present the $19,500 degree is a near-term resistance degree.
Bitcoin rejects $19,500 for now
On Nov. 25, Bitcoin worth was rejected at $19,500 with a comparatively giant quantity throughout high spot exchanges. On Binance, for instance, BTC worth hit $19,484 earlier than seeing a slight pullback to sub-$19,300.
The minor rejection probably occurred due to the stacks of promote orders between $19,450 and $19,550.
A well-liked pseudonymous dealer often called “Byzantine Common” shared the order books of all main exchanges that confirmed $19,500 as a key space for sellers.
— Byzantine Common (@ByzGeneral) November 25, 2020
Vijay Boyapati, a Bitcoin researcher, equally mentioned that the $19,500–$19,550 vary stays because the final promote wall earlier than a brand new all-time excessive.
Let’s gooooo. Previous this child wall most prior trade all time highs are going to get taken out in a short time pic.twitter.com/7E0gmgdgpD
— Vijay Boyapati (@real_vijay) November 25, 2020
If Bitcoin doesn’t retest the $19,500 space once more within the subsequent a number of hours, this might imply that one other drop is probably going. Contemplating that it could be the final resistance till the brand new all-time excessive, merchants anticipate some response from sellers.
One other small pullback would profit Bitcoin as a result of it could additional neutralize the futures funding price. The funding price of BTC futures has elevated as soon as once more to 0.07% on Binance Futures and different exchanges.
Contemplating that the typical funding price of Bitcoin is 0.01%, one other short-term drop to reset the derivatives market might even strengthen the upward momentum.
Shorts being at ranges unseen since April is a variable
Nevertheless, a variable to contemplate is that the variety of shorts within the Bitcoin market is at its highest since April.
In March, the value of Bitcoin crashed to under $3,600. Subsequently, it continued to climb, finally surpassing $19,000. The rally accelerated in April when brief contracts hit a yearly excessive.
The chance of a brief squeeze rises when the variety of brief contracts available in the market will increase. A brief squeeze happens when the value of an asset continues to go up regardless of the presence of great promoting strain.
This pattern causes short-sellers to market-buy their positions, fueling extra shopping for demand available in the market. A pseudonymous analyst often called “Cactus” wrote:
“$BTC shorts are on the highest level since April 2020…”
If the variety of shorts continues to extend, it could additionally trigger the futures funding price to say no. In a manner, this might make the rally extra sustainable within the medium time period.