Three reasons why traders expect Bitcoin price to continue rising after reaching $24,000

On December 19, the price of Bitcoin broke through $24,000, setting a new all-time high. On Coinbase, BTC reached a high of $24,200 and has since consolidated in the $23,500 to $23,800 range.
Three factors drove BTC prices up in a short period of time, leading to a record high. These factors are a massive short squeeze, stacked sell orders at $23,600, and the market’s reaction to the U.S. Treasury Department’s self-operated wallet rule proposal.
Large-scale short-selling pressure reappears at $23,600
According to Bybt.com, $138 million worth of short contracts were liquidated on the day of writing.
The massive liquidation of short contracts occurred as Bitcoin broke through $23,600, a key resistance area due to the accumulation of sell orders on major exchanges.
On Bitfinex, the $23,600 and $23,800 resistance levels had a large number of sell orders before the rebound occurred. As the Bitcoin price started to rise, it squeezed the shorts and sellers in the $23,600 to $23,800 resistance range.
Typically, a short squeeze occurs when sellers are forced to cover their positions in the market as the price of Bitcoin rises. This causes a surge in buyer demand in a short period of time, often leading to a sharp breakout to the upside.
The market is not affected by the new US FinCEN regulations
On December 19, the U.S. Treasury Secretary revealed a rule proposal regarding self-hosted wallets.
The rule requires exchanges to track deposits and withdrawals of more than $3,000 from non-custodial wallets. If the transaction amount exceeds $10,000, the exchange must report it directly to the Financial Crimes Enforcement Network (FinCEN).
However, as analysts explained, the rule itself is not as bad as industry executives initially thought. Unless the proposal becomes law, Bitcoin prices and the broader crypto market are likely to ignore the news, Cointelegraph reported.
Jake Chervinsky, General Counsel at Compound Finance, said:
“Let’s look at the bright side first. This doesn’t require KYC for every transaction on non-custodial wallets. It doesn’t outright ban self-custody. It doesn’t outlaw the use of permissionless networks. It really, really, could be worse.”
However, despite the positive catalysts, in the short term, traders believe Bitcoin could consolidate or pullback due to overextension of the rally.
Cryptocurrency trader Scott Melker noted that the Bitcoin relative strength index (RSI) on the 4-hour chart suggests an overbought bearish divergence may be on the horizon. (Cointelegraph)