The Bitcoin (BTC) price peaked at $ 19,469 on Coinbase and peaked since the peak in December 2017. While the dominant cryptocurrency is close to surpassing the high record, there are some warning signs to watch out for.

There are three possible reasons why Bitcoin is facing a potential of $ 20,000: bullish gain, overhead resistance and a crowded derivatives market.

Possible scenario for ox trap
A cryptocurrency trader aka Bitcoin Jack, who called Bitcoin a bottom in March, has created a possible bull trap scenario.

The term ox trap refers to a technical pattern in which retrospective buyers or buyers are caught when the price of an asset falls.

If you ditch bitcoin from $ 19,200 to $ 19,300, the trader assumed that a reversal is likely. He suggested that the $ 16,000 level would remain strong overall support.

Referring to the expectation of a potential Bitcoinjack price development, a trader known as Nikos confirmed that such a trend is possible. He wrote:

“It’s scary to see a drop to 12K because my levels are combined between 16-18K. But yes, it is quite possible that resistance usually does not break on the first try. This can be seen from the previous PA. ”
$ 20,000 – High resistance level for Bitcoin
If Bitcoin exceeds $ 20,000, it will go into pricing when we look for a new limit. Above $ 20,000, there is no data or historical evidence to suggest that BTC will exceed a certain price.

In theory, BTC can help achieve various goals that many executives and industry analysts have shared over the past year. Most estimates range from $ 25,000 to $ 100,000 per continuous cycle.

Consequently, sellers will show significant interest in aggressively protecting Bitcoin from over $ 20,000.

The financing rate is very high
Sellers may find it necessary to add less than $ 20,000 to their contracts due to higher financing rates.

On major cryptocurrency exchanges, the funding rate for a permanent bitcoin exchange varies from 0.05% to 0.1%. This means that buyers or holders of long-term contracts pay card sellers most of their positions in commission.

Given that financing rates are so positive, short traders may find it necessary to sell aggressively below $ 20,000.

An active OTC market is unstable
However, data along the entire chain show that the OTC market is active. This usually indicates that whales, high-wealth investors and institutional investors can buy bitcoin.

CryptoQuant CEO Ki Yong Joo said that while some repairs could be made, it is likely that $ 20,000 will be crossed. Key sa:

“OTC markets are still active. The inflow of money in BTC dollars hit the lowest level in three years a few days ago. Only 3% of the transactions are used to deposit / withdraw funds in the network. We may have corrections, but I think it will. pause 20k “. At the end.”

Source: CoinTelegraph

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