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Bullish Bitcoin Case Could Be Due To CFTC Scramble

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A new narrative has suddenly spread across the crypto market potentially presenting a bullish case behind Bitcoin’s recent resiliency. The reason? A possible retail buying frenzy in China spurred by the Chinese government themselves.

While the idea is plausible, and the crypto asset failing to return under $10,000 could back up the theory, analysts could be overlooking another clear reason for a sudden sharp increase in non-zero BTC wallets.

Respected Bitcoin Analyst Sheds Light On Bullish Case From China

Last week, a triple threat of negative news should have shocked the crypto market, but instead, it barely dented the price of Bitcoin. In the past, news that the CTO of BitMEX was arrested and the CFTC was targeting the popular derivatives exchange would have been enough to tank the price per BTC.

Instead, Bitcoin is now trading higher today than where the tiny initial selloff took it at first. Market participants expected more downside following this news, the fact KuCoin was hacked, and the United States President contracted Covid19.

RELATED READING | ONE THREAT COULD OVERTURN OVERWHELMINGLY BULLISH BITCOIN SENTIMENT IN Q4

The fact that the leading cryptocurrency by market cap has held up this strong, could be a sign of the halving supply slash taking effect, or it could be another fact that Bitcoin analyst Cole Garner has recently brought to attention.

Garner says that new BTC addresses were “of the charts” last week, and it could very well be due to the CCP broadcasting messages over state-run media, encouraging the purchase of cryptocurrencies. These mentions called out the asset classes’ performance compared to the rest of mainstream finance amid the pandemic and more.

Garner believes there’s a financial incentive for the Chinese government to encourage growth in the Bitcoin mining industry, which is dominated by the country. In turn, the Chinese government could be aiming to spark a bull run in cryptocurrencies to further boost this booming industry.

The explosion in Chinese retail buyers taking heed of that message, Garner explains that could be behind both the increase of non-zero BTC addresses and the recent price resiliency. However, there could be a more obvious reason.

BTCUSD Weekly - Is China Retail Buying Behind The Bitcoin Breakout? | Source: TradingView

 

But Is The Boost In BTC Wallets From BitMEX Users Scrambling?

The argument on the other side of the coin is, that the recent BitMEX drama could explain the reasons for both price resiliency and for the rapid rise in BTC addresses.

Another crypto analyst offers his take, explaining that he himself created several new BTC wallets to move funds off of BitMEX in hopes to obfuscate who the owner of the wallet is. Users in the US who may have accessed the platform through a VPN could be taking extra steps to hide any trace of their time spent on the derivatives exchange.

 

Furthermore, BitMEX traders could be closing out short positions, in order to move funds off of the platform. As each short position is closed, it acts as a buy order of Bitcoin that could be helping to prop up prices as others sell their BTC.

RELATED READING | THIS UNUSUAL BITCOIN ADOPTION METRIC SETS NEW ATH

Whatever the case may be, we’ll soon find out, as an explosive, decision-making move is expected soon either way.

Featured image from DepositPhotos, Chart from TradingView





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Bitcoin

Bitcoin whale clusters show these are the strong support levels

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Since topping out at $19,484, Bitcoin price has struggled to reclaim the $17,000-$18,000 level. As the price continues to decline, traders are targeting key underlying support levels to determine where traders will buy if BTC price continues to fall.

The immediate support levels based on whale clusters are $16,694, $16,411, and $16,064. Below the $16,000 support, $15,355, $14,914, and $13,740 that could serve as macro support areas.

Whale clusters form when whales accumulate BTC and do not move their recently acquired funds. The clusters also indicate where whales last bought, signifying potential support areas.

Bitcoin whale clusters. Source: Whalemap

$16,411 is the short term level to watch for Bitcoin

The price of Bitcoin has been showing weakening momentum in the past 24 hours. Following such a major correction, some consolidation is to be expected as the price searches for stabilit.

One positive trend is that buyers have been aggressively defending the $16,411 support area, which is marked by whale clusters. This shows that there is sufficient buyer demand in the market to prevent a broader pullback, at least in the short term.

On Nov. 27, Bitcoin tested the $16,200 to $16,400 support range twice in a span of 22 hours. Both retests were met with a decent response from buyers, as BTC surged above $16,800 in both cases.

For most of the day, Bitcoin remained above $17,000 and peaked at $17,400, showing signs that BTC is regaining its momentum.

Still, some traders are not ruling out the possibility of BTC dropping to the lower macro support areas. A pseudonymous trader known as “Wolf” said the weekly chart is showing signs of overextension. As such, he said that the $13,000 region could get tested. The trader explained:

“Differently from $ETH, $BTC looks way over extended from the weekly 21EMA, still far from interesting support. My ideal entry would be the outlined major support @ 13k’s. Currently we might hold the 16213 weekly support, then head lower for an ABC correction.”

Another pseudonymous trader known as “Crypto Capo” suggested a similar trend. He said that he sees a scenario playing out where BTC rises to $18,000 and then falls to the $13,000 region.

Traders expect Bitcoin’s consolidation to last for weeks

Although there are bearish short-term predictions from long-time Bitcoin investors, some technical analysts say that consolidation could last a while.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said the market faced a healthy pullback. Following the correction, Poppe said that consolidation could last for several weeks. He said:

“Relax and zoom out, market is making a healthy correction and giving everyone a great opportunity to invest. Don’t be impatient, the market will make a natural bottom to confirm it’s in. It just takes weeks.”

In the short term, the immediate area of interest for buyers remains the three whale cluster levels at $16,694, $16,411, and $16,064. If BTC falls below these levels convincingly, the probability of a deeper correction could significantly spike.

Following the sharp drop in the price of Bitcoin (BTC), whale clusters show several areas as key support levels. These levels could allow BTC to stabilize and regain its momentum in the short term.