Bitcoin has managed to hit $16,000 on Wednesday after repeatedly eyeing the psychological resistance level for several weeks.
However,
the principal cryptocurrency experienced a sell-off shortly after touching the
three-year high. Traders decided to book their profits, showing a consensual
agreement that placing new Long entries at $16,000 is a risky trade. As usual,
BTC/USD failed to close above the level that led its rate lower in the
successive hourly sessions.
As of
Thursday, the pair was trading below $15,900. It earlier ceased an attempt by
bears to move the price below $15,446. That also showed a comparatively higher
demand for Bitcoin around $15,000 — which should lead the price back towards
testing the $16,000-resistance level.
But does
that mean that Bitcoin would keep rising forever after closing above $16,000?
One analyst thinks it won’t.
THE CRASH
CALL
A
pseudonymous trader, operating under the first-name alias ‘Loma,’ stated that
Bitcoin would experience its “first real crash” despite staying in an extended
bull market.
The
analyst anticipated that the cryptocurrency would break above $16,000 while
eying an extended move towards the $16,400-16,700 area. But thereon, it would
suffer its first major downside correction after months of relentless upside
moves.
“The new game-plan is we’re going to perform an elaborate upwards chop that rekts [long timeframe] traders,” he explained. “Push it past the general consensus bullish target — say $16,400-16,700 — then we have our first real crash that reminds everyone the destructive nature of BTC even in a bull [market].”
The statements matched what Tony Vays, a crypto-focused financial analyst, said about Bitcoin and its imminent price pullbacks. The only difference was his upside target: $20,000, Bitcoin’s record high to date.
This $BTC $15k -15.5k consolidation is a good thing, the longer it consolidates the higher the chances of for a breakout higher. But #Bitcoin going too far too fast this year (like $20k) would open the possibility of a big correction. See Clip.
— Tone Vays (Unconfiscatable.com) (@ToneVays) November 11, 2020
Full Video: https://t.co/YWilPeECBJ pic.twitter.com/8nzX6XeJKU
BITCOIN
LONG/SHORT RATIO
Bearish warnings also emerged out of the Bitcoin derivatives market.
Data
fetched by DataMish.com a worrisome imbalance between open Long and Short
positions. As of the press time, about 76.24 percent of trades were Long
Bitcoin while the rest were Short. That put the whole Bitcoin market at risk of
massive long liquidations should the price trend reverses.
The same had happened in March 2020, wherein a spot-led price crash caught bulls at the wrong side of the market. A cascade of massive Long liquidations ensued, leading the BTC/USD exchange rate to as low as $3,858.
Only
this time, the market is trading a bullish scenario under a renewed confidence.
Many mainstream investors, asset firms, and corporations have been accumulating
Bitcoin to protect their portfolio from the potential aftermath of record-low
interest rates and unprecedented levels of monetary and fiscal stimulus.
That is
prompting small traders to maintain their bullish bias for the long-term.
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