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Bitcoin breaks $16K but analyst warns about potential sell-off

  • While Bitcoin breaking the strong resistance of $16K is the first step to $20K, a sell-off from whales seems possible too. 
  • While the market has recorded increased selling activity by whales, long-term investors continue to buy and hold.

On Nov.12, Bitcoin surpassed the $16,000 level, which it has not visited since the 2017 rally. Although it briefly dropped to $15,600, the king of crypto quickly recovered and showed resilience above $16K. The new high of Bitcoin leads to extreme optimism in market sentiment and the fear & greed index of Bitcoin has climbed to 89, indicating extreme greed.

While Bitcoin breaking the strong resistance of $16K is the first step to $20K, this also leaves it vulnerable to a sell-off from whales who might consider $16K a good place to book profits.

CryptoQuant CEO Ki Young Ju remarks that whales have fastened their pace to move more BTC to major exchanges, which often indicates that whales are prepared to sell their BTC. Currently, the Exchange Whale Ration hovers at 85%, a figure that foreshadows a correction.

Another imminent danger may be the highly imbalanced long and short positions in the derivatives market. According to the data of DataMish.com, long positions occupy about 76% of the total open positions. Should Bitcoin make a correction, long traders may find themselves being caught in a massive long liquidation.

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A similar scenario took place in March 2020, when a sudden price crash to $3K caused a bloodbath among long traders.  However, a significant pullback seems unlikely as Bitcoin has turned $15,000 into its support zone.

Bitcoin is preparing for a post-halving rally

While the market has recorded increased selling activity by whales, long-term investors continue to buy and hold.

“This volatility is just fast money funds that play $BTC as a higher beta $GOLD dumping on vaccine news. The players that enter on behalf of the longer-term thesis for Bitcoin are not changing their positioning.” commented cryptocurrency trader Cantering Clark.

When we look back on history, the price of BTC all rallied to a new high 14 to 16 months following the halving. If history rhymes, a bull run in mid-2021 is not surprising at all.

According to a macro analysis by crypto-asset trader Josh Rager, Bitcoin is expecting an uptrend. He wrote: “Every time Bitcoin has closed above the previous monthly all-time high – a 700% to 1000% uptrend has followed. November could be the first monthly close that we see breaking the previous high and historically that’s been a very bullish sign for the crypto market.”

Bitcoin chart

Compared with the last post-halving cycle, Bitcoin has definitely gained more recognition as a store of value or investment asset, thanks to the endorsement of large companies and billionaires. Public recognition and adoption are two of the great momentum for Bitcoin to appreciate. Bitcoin clearing $16,000 will put it in the spotlight again and spike mainstream interest, which could boost Bitcoin to $20,000.

How to earn profits from the ups and downs?

Bitcoin price is expected to stay relatively calm before an explosive move is made. But the long-term outlook remains bullish. Traders can prepare for the price swings by watching key levels and set stop losses.

Bexplus, a leading Bitcoin-based trading platform offering 100X leverage futures trading on BTC, ETH, XRP, EOS, and LTC, provides traders with opportunities to make profits from both the downside and upside.

Besides futures trading, you could invest your bitcoin in the interest-bearing wallet to hedge against volatility. Up to 30% annualized interest is available. No KYC and no deposit fee, you can start to grow your wealth with your bitcoin within minutes. With the Bexplus wallet, you can comfortably sit back and wait for the bull market.

 Advantages of Bexplus

  • No KYC requirement, registration with Email verification
  • Demo account with 10 BTC for traders to get familiar with leverage trading
  • 100% bonus for every deposit and 10% off of transaction fee
  • Intuitive and full-featured App on Apple App Store and Google Play
  • Affiliate program with up to 50% commission reward
  • 24/7 customer support

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