The Bitcoin exchange rate has climbed to over USD 17,000 for the first time since December 2017.
The Bitcoin (BTC) price broke through the US$17,000 mark for the first time since December 2017, continuing its current upward trend. Shortly before, BTC had fallen below its previous parabola, which was initially a cause for concern.
Three factors may have contributed to the current rally: a new parabolic trend, the resilience above $16,000 and the fact that Bitcoin is withstanding selling pressure from whales.
New parabolic trend
On 16 November, Cointelegraph reported that analysts had Crypto Nation Pro found that the price of Bitcoin had fallen below a parabola dating back to September.
Although this caused concern, it must be said that there could be new parabolic trends in a bull cycle. When BTC fell below the parabola, some analysts said that BTC could form a new parabolic uptrend.
When Bitcoin falls below a parabola and enters a short term bear cycle, the price usually falls rapidly and can drop by up to 80 percent. However, in recent days, BTC has remained stable above US$16,000.
Bitcoin’s stability reduced the likelihood of a sharp short-term decline and eventually led to a rally.
Resistance above $16,000 was important
The fact that Bitcoin was able to hold steady above $16,000, after initially falling to $15,800 on November 16, was key to the recent rally.
Many people predicted that Bitcoin would experience a profound short-term correction. Gold fell, for example, when the positive results of Moderna’s vaccine trials were made public. The BTC faced strong resistance at $17,000 due to on-chain orders. It was therefore difficult to overcome this level.
But the momentum of Bitcoin was simply too strong and the rally continued. When the BTC showed stability after falling below the parabola, traders said the technical pattern was positive.
Trends that typically occur during bull cycles are also beginning to show up again. According to the on-chain analysis firm Intotheblock, 99 per cent of the addresses that own Bitcoin are profitable. The company commented:
„About 99 percent of the addresses that currently own BTC are profitable. There are only 164.11 ‚thousand addresses that have bought 44.91 thousand BTCs that are not yet profitable‘. We could soon see 100 percent profitability for all Bitcoin owners“.
Some people might now argue that this indicates that many investors are making profits and could cause a pullback. But, as Bloomberg reports, this rally has not attracted much media attention. This makes it less likely that investors will suddenly cash out their profits.
Bitcoin withstood the selling pressure from whales
Throughout November Cointelegraph reported that Whales and Miners were selling large quantities of Bitcoin. This means that there was considerable selling pressure on Bitcoin last month.
However, despite the immense selling pressure from the whales, the Bitcoin price reached the $17,000 mark.
On 15 November, Cointelegraph also reported that a whale had either sold $100 million worth of Bitcoin on Bybit or opened a short position of that value.
At that time, the Bitcoin exchange rate was around $15,900. The recent rise in the price to over $17,000 suggests that many whale sale or short orders have probably been squeezed out in recent days.
The combination of resilience, a potentially new parabolic trend and the fact that BTC is able to withstand whale pressure gives Bitcoin an optimistic medium-term outlook.