On November 17, 2020, the price of bitcoin surged above $17,000 for the first time since December 2017. In a move that continues its current strong uptrend, many believe that the next destination is near its all-time highs located around $20,000. The latest rally comes after the flagship crypto broke out of the previous parabola, which at first caused a few concerns.
Analysts believe that three factors might have contributed to the current rally: resilience above the $16,000 level, a new parabolic trend, and bitcoin is absorbing whales’ selling pressure.
New Parabolic Trend
On November 16, analysts had discovered that the BTC price had dipped below a parabola dating back to September. Although the trend appeared worrying, new parabolic trends may reemerge in a bull cycle. In that context, when bitcoin dropped below the parabola, some of the analysts believe that bitcoin might form a new parabolic uptrend.
Normally, when bitcoin drops out of a parabola and goes into a short-term bear cycle, the price also dips steeply and can correct by almost 80%. In this scenario of bitcoin in the last several days, it remained stable above $16,000. That stability of bitcoin weakened the possibility of a steep near-term drop, which made bitcoin to rally.
Strength Above $16K Was Crucial
BTC maintaining its ground above $16,000 after its initial plunge to $15,800 on November 16 was critical for the latest rally. There was a huge narrative that bitcoin would experience a deep short-term correction. For instance, gold plummeted on the positive nature of Moderna’s vaccine trial results.
Bitcoin encountered a major resistance level at $17,000 as a result of the on-chain orders which made it quite challenging for the crypto to break past the zone. But since then, the level seems to have given way to the bulls with the crypto recording a high of $17,362 at the time of writing.
The momentum is too strong to cut off the rally. When the flagship crypto was showing some stability after the initial breakout of the parabola, traders believe that the technical pattern is strongly optimistic.
Trends that normally arise in a bull cycle are starting to show again too. Interestingly, 99% of the addresses holding bitcoin are profitable, according to on-chain analytics firm Intotheblock. The firm stated:
“Roughly 99% of the addresses currently holding BTC are experiencing profits. There are only 164.11 ‘thousand addresses that bought 44.91 thousand BTC that are still out of the money.’ We could be experiencing soon a 100% profitability for every Bitcoin owner.”
Some might insist that this metric suggests most investors may take profits and in the end create a pullback. However, as Bloomberg reports, the rally has been mainly silent in terms of mainstream media involvement. Hence, a sudden take-profit rally is less likely.
Bitcoin Absorbed Whale Selling Pressure
Whales and miners were selling large amounts of bitcoin since the start of November. It meant that there was a considerable amount of selling pressure developing in the bitcoin market in the past month.
But amid all that, bitcoin’s price still surged above $17,000 despite the pressure from the whales. On November 15, reports emerged that a whale either shorted or sold $100 million worth of BTC on Bybit.
At that time, the BTC price was trading at just under $16,000, hovering around $15,900. The latest price spike above $17,000 indicates that most of the whale sell or short orders might have been squeezed in the past several days.
The integration of bitcoin withholding whale pressure, the development of a possible new parabolic trend, and bitcoin’s resilience make the medium-term of the bitcoin market optimistic.