All eyes are on Bitcoin in the run up to the end of 2020. Just over a week ago, it reached $19,920 and starts this week at $19,247, indicating that there is a struggle to get the price over the $20,000 mark of its previous all time high (ATH). What is the reason for this?
Analysts, according to Coindesk, say it is very simple: “There are too many sell orders very near the $20,000 level because some Bitcoin holders are afraid of near-term sell-offs.”
Simon Chen, executive director of investment and trading at Hong Kong-based crypto lender Babel Finance, said, “A huge [number] of sellers are offering orders near the $20,000 level, which has no doubt created a strong resistance level.”
Lingxiao Yang, chief operating officer at crypto quant firm Trade Terminal commented that the $20,000 level “is like psychological warfare for many,” but added that this emotional element has largely been seen on the retail investors’ side, while institutions are more in the “buy the dip” mindset.
Ki Young Jun, chief executive officer of CryptoQuant tweeted, “The fact that whales don’t withdraw means that BTC is available for selling. If whales think the price will go up, they’ll withdraw BTC a lot.”
Denis Vinokourov, head of research at Bequant pointed to the fact there were more bitcoins being wrapped on Ethereum than bitcoins being created by bitcoin miners, saying, “It is worth remembering that the initial minting was done at much lower absolute [pricing] levels, and taking some profit and locking assets in the future makes sense from a prudency standpoint.”
And Vishal Shah, founder of derivatives exchange Alpha5, said that he believed new Bitcoin investors may be “agnostic” regarding exactly where they are purchasing in the range between $15,000 and 20,000 and more concentrated the cryptocurrency’s general trajectory.