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#1 11-12-2020 13:56:07

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3068
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BTC/USD: Bitcoin once again fails to reach $20,000

BTC/USD: Bitcoin once again fails to reach $20,000


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An increased level of adoption has recently allowed the price of Bitcoin to reach a new historical high, with trading once again very close to the $20,000 level.

Why "once again"? Exactly 3 years ago, Bitcoin's parabolic rise stopped at similar levels. Because it did so this year as well, technical analysts are wondering if it is possible that Bitcoin has formed a double peak? A double-top figure shows a level or area where the market hesitates twice, being rejected at strong resistance.

Halving of Bitcoin, Ethereum. What might happen next?

One of the biggest surprises of the year in the cryptocurrency market was the good performance of Ethereum. It has risen by more than 300% since the beginning of summer, outperforming BTC, which has risen by "only" 200%. This relationship is meaningless if one considers the halving thesis in the case of Bitcoin. If the halving theory is valid, Bitcoin should have outperformed Ethereum, not the other way around.

This means that there is something strange happening with both cryptos. Is it Bitcoin that is lagging behind, or simply that the short pressure on Ethereum was stronger?

The $10,000 level proved to be a key element for Bitcoin this year. In fact, it is common for round figures to have a psychological effect on market players. One of the best known biases in trading is that people tend to enter and exit the market with round numbers. For example, if one is bearish, the EUR/USD pair at 1.2132 will probably set the stop-loss at 1.22 and aim for 1.20 - round numbers.

In the crypto-currency market, however, volatility is much higher than in the currency market. Round numbers such as $10,000 and $20,000 are large enough to provide solid support and resistance. Moreover, the fact that Bitcoin's uptrend has been strong enough to bridge this distance in less than 60 days tells us a lot about the differences between the two markets.

The problem with Bitcoin and other major crypto-currencies is that nobody sells. So any price drop is offset by strong demand from individuals. However, as last March has shown, when the liquidity of the dollar decreases, traders even flee the security offered by Bitcoin.

In the future, Bitcoin has a chance to mature only if it manages to invalidate the double top thesis. To do so, it must stay above $17,500 and continue to consolidate. In doing so, it puts pressure on the round number. Otherwise, it will put pressure on those who bought close to $20,000 and who will sell at the first sign of a precipitous drop in price.

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"Anything worth having is worth going for - all the way." - J.R. Ewing

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