The price of Bitcoin (BTC) hit a new high of over $ 29,400 on major exchanges on January 1. In other words, BTC is only 2% away from reaching the USD 30,000 psychological resistance level.
Breaking $ 30,000 could spark renewed confidence in the market with the last remaining technical roadblock just below this level.
Therefore, sellers would try to defend the USD 30,000 resistance level with stacked sell orders in the near term. Exchange order books show large sell orders in the $ 29,800 to $ 30,000 range.
$ 29,800 is crucial for Bitcoin’s next step
Exchange order books on both Binance and Bitfinex show relatively large sell orders of $ 29,800 to $ 30,000. This means that sellers would try to lead a Bitcoin pullback before it hits $ 29,800.
A pseudonymous cryptocurrency trader known as “Loma” similarly said that if Bitcoin declined at $ 30,000, it would likely fall from $ 29,800. He said:
“BTC is either blowing $ 30,000 into the $ 31-33k area in the next few days or we’re leading the way and declining for about $ 29,800. Basically what I mean is if you short $ 30k, chances are you will be run over. “
Traders in the Bitcoin futures market have been trying to push down the price of BTC and have aggressively shorted for the past 24 hours.
The funding rate for futures on Coinbase and other major exchanges has remained at around 0.01% despite the recent rally. At times it fell below 0.01%, indicating that most of the market went short or sold BTC.
That funding rate is a New Year’s gift. I’m leaving $ BTC #Bitcoin pic.twitter.com/GSPCDnZuKu
– Coinalyze (@coinalyzetool) December 31, 2020
However, retail investors in the Bitcoin spot market, which refers to exchanges without derivatives and leverage, have built up BTC.
On December 31st, shortly before the new year, the price of Bitcoin soared to a new record. Analysts at Santiment said they saw an increase in movements in the chain, which could indicate accumulation in the retail sector.
Since Coinbase saw a big premium over other major exchanges, such as Binance, retail investors on Coinbase likely bought Bitcoin as it entered the New Year. The analysts said:
When #Bitcoin markets first opened about 30 minutes ago (UTC) in 2021, prices have soared to $ 29,460 as $ BTC made another AllTimeHigh. Active addresses are increasing in recent hours to support this push. “
In the short term, Bitcoin would likely face a battle between futures market short sellers and spot retail investors as the price moves closer to $ 30,000.
What happens now?
In the short term, the key to seeing Bitcoin’s behavior is at $ 29,800. There is a strong possibility that it will retreat without rising to that level, which could lead to a decent sized correction.
If BTC moves past USD 29,800 without much effort, a broader rally above USD 30,000 is likely in the near future.
As Cointelegraph reported earlier this week, Bitcoin will seek to expand its profits in the first quarter of 2021, several statistics suggest.