Bitcoin surpassed $ 16K but analyst warns of potential sell-off

While the BTC that overcomes the strong resistance of $16 thousand is the first step to $20K $. There is also an increase in whale sales activity, and long-term investors continue to buy and hold.

Bitcoin consolidates before a new push

On November 12, Bitcoin surpassed the $ 16,000 level it hadn’t visited since the 2017 rally. Although BTC demonstrated slight decline, the cryptocurrency quickly started to recover and demonstrated determination of the bulls. The new high of BTC causes extreme optimism in market sentiment, and the fear and greed index rose to 89, indicating extreme greed.

While Bitcoin breaking the strong $ 16K resistance is the first step towards 20K, it also makes it vulnerable to whales` sell-off, as major players may consider 16K a good time to make profit.

CryptoQuant CEO Ki Yong-Joo notes that whales have accelerated the pace to move more BTC to major exchanges, which often indicates that whales are ready to sell their coins. Currently, the stock market diet of whales is hovering at 85%, and this figure portends a correction.

Another imminent danger may lie in highly unbalanced long and short positions in the derivatives market. According to DataMish.com data, long positions occupy about 76% of the total number of open positions. If Bitcoin makes a correction, traders with long positions may be involved in mass liquidation of long positions.

A similar scenario occurred in March 2020, when a sudden collapse in prices down to $3 thousand caused huge losses among long traders. However, a significant pullback seems unlikely as Bitcoin has turned 15,000 into its support zone.

BTC is preparing for a rally after halving

While the market is seeing an increase in whale sales activity, long-term investors continue to buy and hold.

“This volatility is just fast money funds that play $ / BTC as a higher beta version of gold on vaccine news. Players who speak on behalf of the long-term thesis of BTC do not change their positioning,” commented cryptocurrency trader Cantering Clark.

When we look back to history, the price of BTC rose to a new high 14-16 months after the reward was halved. If history repeats itself, a bull run in mid-2021 won’t be surprising at all.

According to a macro analysis by crypto asset trader Josh Rager, Bitcoin is expecting an uptrend. He texted: “Every time BTC closes above the previous monthly high, an uptrend from 700% to 1000% follows. November may be the first close of the month that will break the previous high, and historically such things have been a very optimistic sign for the cryptocurrency market.”

Compared to the last post-halving cycle, Bitcoin has definitely gained more recognition as a store of value or investment asset thanks to the support of large companies and billionaires. Public recognition and acceptance are two important impulses for the recognition of a crypto asset. Bitcoin clearing at $ 16,000 will again attract attention to it and cause a rise in interest, which can raise it to $ 20,000.