Bitcoin’s price is consolidating around $19,000 as traders prepare for a possible downturn.
Bitcoin traders are nervous after rejection of US$ 19,500 – Learn about the high and low scenarios
The price of Bitcoin (BTC) was rejected for the resistance level of $19,500 once again on December 4th, as traders became more and more confused about what’s coming next for the BTC/USD pair.
Bitcoin remains close to US$ 19,500
Some predict that the dominant cryptomeda is going through a consolidation phase or another small correction in the short term, mainly because the US dollar is showing signs of a possible recovery.
Others, however, expect the crucial support level of $18,500 to be maintained, which would likely set BTC to test the $20,000 key level again and a new historic high in the near future.
In the short term, traders generally expect two important levels of support and resistance for Bitcoin. First, the $18,500 area is critical to ensure that BTC’s bullish market structure is maintained. Second, the $19,500 level is a massive resistance level for BTC. If BTC exceeds $19,500, traders expect a further rise towards its historic high, which is currently below $20,000.
Meanwhile, Bitcoin is becoming more difficult to trade because of volatility at the $19,500 resistance level. BTC has experienced a sharp drop every time this area was tested last week.
A trader under a pseudonym known as „CryptoGainz“ believes that the ideal entry point for Bitcoin traders is now above the resistance level of $19,500. However, this may not be the case for two reasons: it puts traders at risk of a strong sale at record high once again, as $20,000 remains a high risk sales barrier for bulls. He said:
„What is annoying about this price action for me is that if my bids are not hit, I am forced to prolong the break, which at this point puts me around 19.7k or more, which means that my entry is not sure of a setback there is an epic impulse movement (read: 10% +) of this level. ”
Whale sales below the historical maximum are the main reason why Bitcoin is experiencing enormous volatility each time it approaches $19,500.
CryptoQuant CEO Ki Young Ju told the Cointelegraph that whale inflows reached a high in eight months when BTC came close to $20,000. The combination of heavy whale and mining sales puts BTC at risk of a correction, Ju noted.
In the short term, this could mean Bitcoin facing weeks of lateral consolidation or a deeper correction, according to Ki. In addition, he added that foreign exchange reserves are not decreasing as they were in mid-2020. This shows that whales may be leaving BTC at exchanges to sell if the price of Bitcoin rises. He explained:
„If you look at the average entry of all exchanges (MA of 144 blocks), it reached more than 2 BTC a few hours ago. We reached 2.5 BTC when the price was coming in at $20,000. It was the highest in eight months since the big settlement in March. Looking at the average exit of all the exchanges (72h MA), the whales are no longer withdrawing from the exchanges. They keep BTC in the bags to make them available for sale, I think. Looking at the Miners‘ Position Index, mining companies are selling BTC a lot. ”
Optimistic forecast for BTC in the short term
If Bitcoin rises above the resistance level of $19,500 heavily sold, buyers will have a chance to regain control over the market.
A trader alias known as „CryptoCapo“ said that „bears don’t want to see the price above $19,500“, while bulls don’t want the price to fall below $18,500.
However, if the bulls prevail here, the $20,000 level would be the next – and perhaps most psychologically important – area to be defended by bears in the short term. Other traders, such as CryptoGainz, also said that US$ 19,650 is the level that could trigger a new break for Bitcoin in the near future.
Meanwhile, MicroStrategy, the $3 billion business intelligence conglomerate, has just bought an additional $50 million in Bitcoin at the current price level, which is another optimistic factor for Bitcoin.
MicroStrategy purchased approximately 2,574 Bitcoins for $50.0 million in cash in accordance with its Treasury Reserve Policy, at an average price of approximately $19,427 per Bitcoin. We now have approximately 40,824 bitcoins.