The price of Bitcoin has continued its steady rise and has crossed another important milestone in this latest rally The Coin briefly touched the $16,000 mark, showing little resistance since moving on from around $13,000. This is the first time Bitcoin has been this high since it managed its all-time high of $20,000 on December 17, 2017.
The coin is in a very different place in terms of its market three years ago. It has matured and been further legitimized as cryptocurrencies and blockchain technology has permeated mainstream arenas.
There are a few factors to consider when breaking down why Bitcoin has reached such a milestone, and the good news is that these factors are not borne of speculation and over hype, but are much more sustainable.
A reset derivatives market
Part of Bitcoin’s coming of age has been the acceptance of it as a viable derivatives asset for trading. This space has expanded greatly and has a huge role to play in the market movements of the coin.
A recent dip in price, around the news of a potential Covid-19 vaccine, saw Bitcoin drop in price to $14,800 which made traders quickly turn cautious again. But the drop benefited Bitcoin for two key reasons. First, it allowed whales to take profit on their positions at around the $15,000 support level. Second, it neutralized the futures market by flushing out late buyers or long contract holders.
A weakening resistance
The run-up towards $20,000 does have a few resistance levels, but these are weakening as the rally gains momentum. The $16,000 area served as a heavy level of resistance for Bitcoin. Traders pinpointed the presence of large sell orders at the resistance, indicating that whales are likely targeting this level.
According to Edward Morra, a Bitcoin trader, there is an abundance of sell orders near $16,000. He said:
“Pushed through higher, think it goes for 6 Nov top at least and possibly higher, we have a lot of orders above $16,000 on Bitfinex.”
Support held on
As well as weakening resistance levels higher up, the support levels for Bitcoin, from Whales, held strong. Data from Whalemap shows that whale clusters form when high-net-worth individuals buy BTC and do not move it. The price at which those purchases cluster is then considered a support level.
Bitcoin whale clusters at $13,600, $13,740, $14,120 and $14,900 show that there is a decent floor at just below $15,000.