Bitcoin has managed to stay above the $11,000 mark after hoving in and around $10,000 for several weeks. The coin even went on to push for $12,000 but was not able to make any major breakthrough towards the next $1,000 milestone.
Now, the coin is trading in a range locked in above $11,000 and not much higher, but even after the push towards $12,000 it does not look likely like a big fall or significant correction is on its way.
Even with a few key news stories breaking about BitMEX, and most recently OKEx, the price of Bitcoin has not suffered much. But it is important to understand what made Bitcoin take off in the first place after a slow and steady late September.
The path above $11,000
In mid September, the momentum of Bitcoin slowed amidst a marketwide cryptocurrency crash. From September 19 to September 23, the Bitcoin price dropped from $11,179 to as low as $10,136.
The negative market news around BitMEX and other things certainly didn’t crash the market like many might have expected, but it did dull it’s progress somewhat. Even the US President testing positive for Covid-19 did not have too much of a play on the price, although it did help crypto.
Still, despite the negative macro events throughout the past week, Bitcoin has now recovered beyond $11,300, stabilizing between $11,300 and $11,500. The resilience of Bitcoin, along with positive fundamental and technical factors, significantly reduces the probability of a major price drop.
Low selling pressure
According to Longhash, “Numerous on-chain indicators demonstrate a similar narrative for Bitcoin in the fourth quarter: low selling pressure and high HODLer activity. The continuous decline in exchange reserves over the past seven months indicates that the selling pressure on Bitcoin is dropping.”
Positive High Time Frame Technical Structure
More so, Longhash also points out: “Alongside the positive fundamental data shown by on-chain indicators, the technical structure of Bitcoin at a higher time frame depicts a resilient uptrend. From August to October, Bitcoin has stayed above the $10,500 support level for the majority of the time.”
“Technically, $10,500 is considered a support area because it marked the October 2019 peak. When the price of an asset consolidates above a previous top, in technical analysis it is considered a positive accumulation trend.”
Trading looking good
Data from Skew shows that open interest of the Bitcoin futures market has remained relatively stagnant. In the spot market, the volume of institution-tailored platforms, including LMAX Digital and Bakkt, has stayed high.