3 reasons why Bitcoin’s price hit $ 16,000 for the first time since 2017

The price of Bitcoin (BTC) rose to over $ 16,000 for the first time in nearly three years on Nov. 12. The momentum of the dominant cryptocurrency is getting stronger due to three main factors.

The main catalysts for BTC’s rally are the non-superheated derivatives market, the $ 16,000 retest and the $ 14.9k Whale Stock Zone.

The weekly chart of Bitcoin showing the percentage profit. Source: TradingView.com

The recent crash has restarted the Bitcoin derivatives market

On November 10, the price of Bitcoin fell sharply to $ 15,072. The stock market crash occurred just 24 hours after another major drop to $ 14,805, which made traders cautious.

Nevertheless, The decline benefited Bitcoin for two main reasons. First, the whales were able to cash in on their positions around $ 15,000 in aid. Second, it neutralized the futures market by knocking out late traders or long contract holders.

Adjusting the futures market and funding rate of Bitcoin futures contracts was critical to sustaining the current rise of BTC.

Futures exchanges in the crypto market use a mechanism called “funding” to achieve market equilibrium. When most of the market is buying Bitcoin, buyers need to incentivize sellers to go short. And vice versaWhen shorts make up the bulk of the market, sellers have to pay buyers.

Before the November 10 crash, BTC’s funding rate was over 0.01%. This indicated that the market wanted or bought Bitcoin, making it oversaturated.

After the minor correction to the USD 15,000 support level, BTC futures contracts were neutralized as funding rates stabilize.

The volume of the Bitcoin futures market is stagnant as the market stabilizes. Source: Skew.com

$ 16,000 test weakened resistance again

Even through the end of November 11, the USD 16,000 area served as a strong level of resistance for Bitcoin.. Traders noted the presence of large sell orders with the resistance, indicating that the whales are likely targeting this level.

According to Edward Morra, a Bitcoin trader, there is an abundance of sell orders close to $ 16,000. The said:

“If I go higher and higher I think it is at least pointing to the November 6 market cap, and possibly higher, we have a lot of orders over $ 16K on Bitfinex.”

Despite submitting large sales orders for $ 16,000, Bitcoin has risen as a result of repeated retests in the past week. The repeated tests weakened resistance, allowing BTC to rise.

The USD 14,900 support zone for whales held up perfectly

Cointelegraph reported that consistently this week the $ 14,900 has become a support area for the whales.

Whalemap data shows that Whale groups are formed when wealthy individuals buy BTC and don’t move the BTC. This shows that the whales are accumulating in a certain area, which is then considered a support level.

Bitcoin whales pile up cash in the $ 13,600, $ 13,740, $ 14,120, and $ 14,900 zones. Source: Whalemap

Despite extreme market volatility influenced by macro factors such as Pfizer’s vaccine development, Bitcoin comfortably held above USD 14,900. The trend has shown that it has become a stable level of support for BTC.

Cameron Winklevoss, the billionaire co-founder of the great Bitcoin exchange Gemini, He stressed the importance of BTC staying above the USD 14,900-15,000 support range. Said:

Bitcoin closed above USD 15,000 for the third day in a row yesterday. It is the first time in history that Bitcoin has held this price level for 72 hours. A new record. “

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