Throughout November 2020, the bitcoin bulls have been in control taking the price to new multi-yearly highs. A few hours ago, the flagship crypto set a new 2020 high exploding above $18,000 for the first time in almost three years. But analysts still expect to see a ‘shallow’ correction before a new all-time high is reached.
On November 17, bitcoin price rallied to $17,858 after a high volume surge underpinned the price and pushed it strongly above the $17,100 to $17,300 range. That range was the zone where many analysts thought that it would act as a strong resistance level. The bitcoin price might continue to rise higher in the short-term if the critical underlying supports hold according to Decentrader co-founder, filbfilb.
The renowned analyst tweeted the chart and said:
“The current PA could still very easily result in a blow-off towards the Golden Ratio Multiplier, currently at 19k.”
As it is evident from the weekly chart, BTC is now quite close to surpassing its $19,763 all-time high reached in December 2017. On many other timeframes, the volume profile visible range (VPVR) indicates that there is little resistance that has formed above $17,000.
Analysts and market experts expected the price of bitcoin to shortly consolidate in the $17,500 to $17,700 range as several traders seek to take profits. However, the bulls seem to be ready to push bitcoin higher. To date, BTC has gained 13.06% since breaking through the $16K resistance. Hence, a stint of consolidation to create support for the next bull run is expected.
The Fundamentals
As for the fundamentals behind the latest price move and the probable outcomes for the short-term, the head of global sales trading at EQUOS, Matt Blom, said:
“The market has extended to the upside, breaking above the trend channel and appears to be entering a blow-out phase. With a strong bull market, the tendency is to call a top, for me, the question is at what point does the rally become unstainable.”
As the flagship cryptocurrency exploded through the $17,000 level, there was a lot of talk about whether its price would reject near 2017 high or go ahead to break through the ‘resistance’ and rally to new all-time highs.
Blom commented:
“If we drive up to $19,050 this week, I would expect a pullback to the $17,000 level. There’s a lot of new money in Bitcoin, they’ve never experienced a Bitcoin retracement! In the past, Bitcoin has retraced sharp up moves, but this time, there is one missing ingredient! The lack of auto-liquidation of leveraged longs.”
Back in 2017, the bitcoin rally was driven primarily by the retail investors and traders running on a huge amount of FOMO. But the scenario is quite different in 2020.
Institutional Investors Come In
All through 2020, reports have emerged that there is a growing trend of large-size bitcoin acquisitions by institutional investors. The latest data also indicates that these increasing volumes at the regulated Bitcoin and Ethereum derivatives markets are arising from the bigger hands that are getting involved in the bitcoin market. Blom concluded:
“The fact the market is now focusing its rallying efforts during the institutional working week is a clear indication that real money has arrived, which leads me to believe the pull-back many are expecting maybe shallow.”
If the bulls continue with this momentum, a new all-time high bitcoin price might be recorded before the end of this year. All indicators point to an upside momentum, but a consolidation phase is expected.
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