The price of Bitcoin reached a new record of $25,945 after a big drop in the futures market.
Bitcoin approaches $26,000 and could break the $40,000 at the next push, says traderMARKET
The price of Bitcoin (BTC) reached a new all-time record of $25,945 at Binance on 26 December, just one day after reaching its record on Christmas Day.
BTC / USDT (Binance) candle chart per hour. Source: TradingView.com
There are many broad reasons behind the Bitcoin rally, such as high institutional demand for BTC. But for the current intraday rally, excess sales at Binance Futures were probably the main catalyst.
BTC now above the price of the stock-to-flow model
Before the increase, many traders were selling Bitcoin on most major futures exchanges. This eventually led to a tightening of sales as short sellers were selling very close to the previous record. As soon as the record broke, BTC started to rise rapidly when the price of Bitcoin entered the price discovery.
According to Bybt.com data, more than $131 million in Bitcoin futures contracts were liquidated in the last 24 hours. As long as the derivatives market continues to see an increase in sellers, the likelihood of further tightening in the near future will remain high.
Moreover, the current high means that the BTC is now Bitcoin System above the mid-tier of the popular stock-to-flow model, which forecasts a target of $100,000 by December 2021.
#bitcoin $25.3K above the value of the S2F $24.9K model
S2F real-time graphics: https://t.co/K2eCFhz43I pic.twitter.com/ErGHZVDeuW
– Plan B (@100trillionUSD) 26 December 2020
What to expect for Bitcoin?
Meanwhile, traders and technical analysts generally remain extremely positive about the Bitcoin price trend. The popular trader Philip Swift, for example, observed that the number of big sellers actually decreased during the current high.
1. The BTC $ price action looks strong here. Few sellers in Coinbase in the short term are shown here for lack of bids (yellow lines) above the price.
In terms of chain activity … pic.twitter.com/NyLfPiH8gi
– Philip Swift (@PositiveCrypto) 26 December 2020
„Big players, with portfolios> 1000btc, have calmed down for the first time in this great race,“ Swift explained. „We can see the number of players> 1000btc falling rapidly over the last week or more. While we can see that the 1-10 BTC (mass retail) wallets have continued to rise continuously over the last few weeks“.
Therefore, a quick look at the top line suggests that many retail buyers are coming in on the Christmas holiday. Potentially due to: a) hearing about BTC from family/friends over the holidays, he is now making new ATHs. b) some more potential exchange of XRP/other alts.
Traders are also increasingly cautious about selling Bitcoin short because it has not yet reached a clear top. Until the peak of the BTC, the chances of a big squeeze in sales that will fuel the price recovery even more in the short term remain high.
In addition, Cointelegraph Markets analyst Michael van de Poppe said the next wave of momentum could push Bitcoin past the $40,000 mark. He wrote:
„Bitcoin is expanding further as it approaches my second point of interest Fibonacci, around $25,800. The higher we go, the higher the next impulse move will bring us. If $25,800 is this temporary maximum, the next boost could bring BTC to $40,000 +. ”
The next logical top for Bitcoin will probably be when the institutional purchase of Bitcoin slows down.
16 / Here are the financial institutions and trading legends that have recognised Bitcoin as Gold 2.0 in the last 4 months:
– JP Morgan
– German bank
– Black Stone
– Bill Miller
– Mass Mutual
– Dan Held (@danheld) 26 December 2020
The most practical way to measure institutional sentiment is to assess the volume of CME’s Bitcoin futures market and Grayscale’s BTC inputs.
Until both institutional investment vehicles see a noticeable decline in demand and turnover, the chances of a profound Bitcoin correction remain low.
Translated with www.DeepL.com/Translator (free version)