The price of Bitcoin reached a new 2020 peak at USD 16,765, and traders expect a much greater rebound to occur in the short term.
The price of Bitcoin (BTC) reached a new annual peak of USD 16,717 at Binance. After the breakout, traders expect a greater rally in the short term.
There are several reasons why analysts expect a prolonged uptrend. First, Bitcoin broke cleanly above USD 16,000, eliminating the USD 16,473 peak reached on November 13. Second, a “sell-side crisis” is brewing as more BTC is being accumulated than is being mined. Thirdly, BTC rebounded despite indicators showing signs of overbuying.
Bitcoin price outlook continues to rise despite drop in Coronavirus vaccine news
1 hour chart of the BTC/USD pair. Source: TradingView.com
Leading Analysts Wrong About Bitcoin Correction
Earlier today, John Bollinger, a veteran trader and creator of the Bollinger Bands indicator, said he was wrong about a Bitcoin correction.
On November 10, Bollinger said that Bitcoin is showing a “short-term ceiling pattern. At the time, Bollinger wasn’t sure if this would lead to a correction or consolidation, but he said he expected the market to cool off.
Several analysts expected Bitcoin to collapse, especially as it approaches the weekly candle’s close. However, BTC steadily recovered, seeing increasing momentum. Bolinger said:
“It seems I was wrong about the possibility of a correction, all we got was a little bit of consolidation and then a return to racing. Discontinuous configurations like this are signs of strength, so currently the path of least resistance is upward. #BTC”
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Derivative traders have also pointed out that the decline in Bitcoin supply is leading to a crisis on the sales side. This trend could be causing BTC to recover even as it tests major support levels.
One futures and options trader known as “Light” said that about 3,000 BTCs have been withdrawn daily since BTC reached USD 10,000. This trend shows that demand for Bitcoin is high and miners are refusing to sell BTC, which is optimistic for BTC. The trader said:
“Now at USD 16,600 from USD 11,000. Since the break of USD 10,000, net BTC has been withdrawn ~3,000 DAILY from the main centralized BTC exchanges… The miners refuse to sell their recently halved bounties on demand and are comfortably above balance.
BTC price reacts positively to today’s vaccine advance
On November 12, when Pfizer announced a highly effective coronavirus vaccine, the price of Bitcoin plummeted by almost 3% in a few hours.
This time, after the long-awaited publication of the results of the Moderna vaccine, Bitcoin has actually increased by almost 5%. In the same period, gold has struggled, gaining just 0.17%.
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But, traders say that if Bitcoin falls as it did on November 12, then it would present an opportunity to “buy the fall”. A popular crypto currency trader known as Hsaka said:
“The last time we heard about vaccines, $BTC followed the stonks in the initial upturn, but eventually succumbed to the drip of gold. Probably a fall worth buying if history repeats itself and opportunity presents itself.
The combination of technical momentum, a crisis on the selling side and the momentum of the rally is keeping BTC stable above USD 16,000. Considering that BTC has not collapsed quickly after its boom, there is a strong argument that USD 16,000 is becoming a reliable support area.