The price of Bitcoin seems to be on track to set a new historical record for these 4 main reasons.
4 reasons why the price of Bitcoin is on the verge of setting a new historical record MARKET AALYSIS
On Friday, the price of Bitcoin (BTC) reached $18,815 at Binance for the first time in nearly three years. After the break-up, BTC is on track to reach a new all-time record in the short term for four Crypto Code important reasons.
The factors that are likely to set a new record are growing institutional demand, reduced selling pressure, a spot market driven recovery, and the importance of the US$ 18,500 break in resistance.
BTC/USD four-hour chart. Source: TradingView.com
Bitcoin is experiencing reduced sales pressure
For Bitcoins holders to sell, they must first deposit BTC at exchanges. When BTC exchange reserves fall, this usually indicates that there is low pressure on the seller’s side of the market.
According to Glassnode data, the accumulated balance of Bitcoin on exchanges fell by 18%. Analysts at the on-chain market analyst firm said that BTC’s liquidity continues its downward trajectory.
This trend is significant because it shows that there is almost no appetite to sell Bitcoin at the current price level, despite its rise from US$3,600 to US$18,700 in eight months.
Institutional demand is growing
After BlackRock’s fixed-income CIO, Rick Reider, discussed Bitcoin on CNBC, billionaire investor Mike Novogratz said the BTC is now an institutional asset.
During his interview with CNBC, Reider said that Bitcoin is here to stay and has the potential to evolve. He suggested that the millennial generation favours the BTC and that strengthening the reality of digital currencies to become conventional payment options were the main positive factors for the BTC.
Considering institutional trends, Novogratz said that 2021 would probably be as good or better than 2020 for Bitcoin. He said:
„Bitcoin is now an institutional asset. Point. The good thing is that most institutions are not there yet. That is why 2021 will be as good or better than 2020“.
The market is driven by spot sales in the midst of a crisis on the seller’s side
On October 10, a cryptomed derivatives broker known as „Light“ said Bitcoin is showing signs of a liquidity crisis on the seller’s side. He noted at the time:
„Bitcoin is experiencing the onset of a liquidity crisis on the seller’s side. Production is totally inelastic, demand, in turn, is reflective. ”
Bitcoin’s performance over the last two quarters has shown a clear lack of sellers in the market. Particularly after halving, which occurred in May, the drop in selling pressure on BTC is a notable positive factor.
In addition to the decline in sellers, the „Cantering Clark“ cryptomeda derivative trader noted that the spot market is leading the rest of the market. He said:
„The spot market is taking the lead.“
The spot market leading the derivatives market is important because it allows traders to use high leverage. When the futures market leads a bullish trend, it becomes susceptible to large price movements.
Maintaining $18,000 as support is key
On 18 November, Bitcoin fell from US$18,500 to about US$17,200, minutes after reaching its two-year high.
The strong rejection on the day showed that large amounts of sales orders were registered above US$18,500. Today’s second break above $18,500 confirms that there is enough momentum in the market to break through the crucial resistance levels of several years and turn them into support.
Based on the combination of these four factors and the fact that the policies of banks around the world of continuous liquidity injections may increase inflation, the likelihood that the BTC will guarantee a new historical record soon remains high.