The whales are helping the price rise steadily, creating a cushion in the event of a pullback. There may be a reversal soon, but investors recommend not waiting for a drop when the price is fully bullish.
The price of Bitcoin has risen steadily to reach USD 55,000, dragging the rest of the cryptocurrencies.
BTC is trading at around USD 53,780, correcting slightly after hitting a local high of USD 55,555. Its price has accumulated a 7.13% profit in the last 24 hours, while it has risen by 27.65% in the past week.
These Factors Catalyzed the Rise in the Price
A significant cascading liquidation of short orders earlier in the month generated the force to start the momentum. The total settled was USD 47 billion, equivalent to 1,200 BTC.
To execute those liquidations, also known as short positions, investors borrow BTC and sell it immediately. They then try to buy at a lower price to profit from the difference between entry and exit prices.
Conversely, when the price is unfavorable, those trying to profit from a possible drop must quickly buy BTC to replace the loan. That adds fuel to the bullish fire, as happened on October 1st and usually happens.
While that trigger is a good start, it is not a solid base for a sustained climb.
However, the whales are currently making the increase steady, which contributes to creating a cushion if a drop in the price occurs.
South Korean analyst Ki Young Ju said that someone bought USD 1.6 billion worth of BTC through market orders in just 5 minutes. In other words, strong hands rather than cascading sell-offs are supporting the price rally.
Analysis of the Price of Bitcoin after It Reaches USD 55,000
The daily chart reveals the great upward strength of the last three days, with a price that hardly needed to go back. After that, a new momentum allowed it to reach USD 55,000.
The trend is bullish, so the 8 EMA and 18-day SMA move in that direction. Those metrics are currently quite far from the price, indicating that the short-term momentum is quite developed. Besides, there may soon be a pullback in the value of the pioneering cryptocurrency.
However, investors should not wait for a drop when the price is fully bullish. Experts recommend not waiting for a pullback to occur since they could lose their money.
After exceeding USD 55,000, the runway for the price of Bitcoin is clear USD 56,578. For that reason, that resistance is likely before the beginning of a correction.
According to the weekly chart, the outlook is more bullish after breaking through resistance at USD 52,663. That suggests that the runway will remain clear to USD 58,968 for the price of the cryptocurrency.
Amid the current development of long-term momentum, it is not unreasonable that an all-time high far from the current one will occur. After all, the cryptocurrency created by Satoshi Nakamoto has proven to be capable of rebounding from its worst drops handsomely.
By Alexander Salazar