Bitcoin (BTC) has passed the $ 13,745 mark and is now on its way to the next major resistance level. Traders have speculated that $ 13,875 is the main short-term region for BTC for two main reasons.

First, bitcoin peaked at $ 13,970 on June 26, 2019. Technically, the previous peak over a year ago is still an important area for sellers.

Second, technical analysts say Bitcoin’s weekly candlestick chart shows $ 13,875 as the next “logical resistance.”

The key factor will be how Bitcoin’s price reacts to the long-awaited resistance level and is likely to level off in the short term towards the end of 2020.

Do investors expect a sharp drop of around $ 14,000?
In recent days, there has been more talk of a significant drop in bitcoin as market sentiment turns into euphoria.

Historically, even in the midst of strong bull cycles, Bitcoin experienced healthy corrections that strengthened the trend.

Edward Moura, a popular cryptocurrency trader, said he expects the market to react to $ 13,875. BTC last tested this level 16 months ago, when its price fell sharply in a short period of time.

This time, traders don’t expect a deep rejection, but a strong reaction from BTC and the market as a whole is expected. Mora sa:

On the higher timeframe chart, this weekly level of ~ $ 13,875 is the next logical resistance. I categorically rejected the 2019 rally, the second test will be less severe, but I think there will be a reaction. Be sure to check out the “maximum of 19 in the weekly offer”.
Over the past week, Bitcoin has tested several major resistance levels in a short time. However, it easily broke through the levels, consolidating above each and showing a stable rally.

For buyers, the ideal scenario for Bitcoin is to rise above $ 13,875 and remain stable above that level. This pattern would indicate a healthy recovery in long-term sustainability levels, which is very optimistic.

Additional Factors Affecting Bitcoin Speed
There are two main and overarching factors that can drive Bitcoin’s momentum in the short term: blackout and weak supply.

As noted by bitcoin investor James Auburn, in October, BTC was convincingly different from the US stock market.

Due to a lack of incentives, uncertainty around the 2020 elections and a sharp increase in the number of COVID-19 cases, the US stock market regularly declines. At the same time, BTC has returned abruptly and the attitude towards the digital asset has improved dramatically.

According to CoinMetrics, the passive supply of bitcoins held for at least one year has reached a permanent high. The researchers said:

“The percentage of supply of bitcoins held for at least one year has never been higher. This is optimistic for bitcoin, especially given this calculation, which has historically peaked during periods when the price was at a local low. ”
The convergence of positive fundamentals, macro and technical factors, coupled with an optimistic technical structure for a longer period of time, increases the likelihood of Bitcoin testing to $ 13,875 without significant corrective movement.

Source: CoinTelegraph