Psychological warfare - Bitcoin bears sniping below $20,000

In recent times, the attention on Bitcoin has never been higher.

Retail investors chasing the rise, long-term believers, investment institutions, etc. have entered the market one after another, jointly pushing the market back to or even exceeding the peak of three years ago.

But specifically for investors, trading is essentially a battle between long and short positions . If someone makes money, it means someone loses money, but at the very least there is someone to take over.

The continuous rise of Bitcoin over the past two months is a unilateral defeat of the Air Force.

But the stalemate in Bitcoin’s market in recent days (constantly hovering around $19,000) means that there have been new changes in the balance of power between the bulls and bears in this battle.

All parties are paying close attention to whether Bitcoin can break through the $20,000 mark. After all, this is a milestone.

Whether or not there is a breakthrough, there will be completely different destinies.

Weak driving force

There are many driving forces behind this round of continued rise in Bitcoin.

For example, over-issuance of currency has caused almost all financial products to rise to varying degrees. For example, the entry of traditional financial institutions has brought more incremental growth to cryptocurrencies.

But now these driving forces have begun to slow down to varying degrees and are no longer as strong as they were back then.

For example, as time goes by, the time for financial institutions (or whales) to exit is getting closer.

According to data from CryptoQuant, Bitcoin whales have not yet withdrawn Bitcoin from exchanges.

CryptoQuant’s CEO also tweeted: “The whales have not withdrawn, which means BTC can be sold.”

“If whales think the price will go up, they will withdraw BTC in large quantities.”

For example, the Grayscale Fund, the weather vane of this market, is considered to be the biggest support for this bull market, so the market is widely optimistic.

But the problem is, isn’t the purpose of pulling up the market to crash it?

Although Grayscale Fund’s crypto assets are still locked up, other investment institutions and whales are not.

Another important point is that more and more bitcoins are circulating in the market.

As the price of Bitcoin continues to rise and is likely to reach its peak, the Bitcoin previously locked in DeFi has also been released.

You should know that when DeFi was at its hottest this year, there were far more Bitcoins on Ethereum than those created by miners.

On the one hand, bulls are constantly buying up Bitcoin, but at the same time, more Bitcoins are beginning to be released.

Short-selling

On the one hand, the driving force is weak, and it is difficult to support Bitcoin's continued strong rise.

On the other hand, we can also see that in the Bitcoin contract transactions of major exchanges, there are too many sell orders below the $20,000 level.

Because investors are still haunted by Bitcoin's performance at the $2,000 mark three years ago.

During the bull run at the end of 2017, the price of Bitcoin quadrupled in two months and peaked, only to fall 70% in the following two months.

“People are trying to sell products based on what happened during the 2017 bull run and at the prices then,” said Simon, executive director of investment and trading at Babel Finance.

In addition, according to data, leveraged funds trading Bitcoin futures on the Chicago Mercantile Exchange continued to increase their short positions, with the total net short open interest (OI) hitting a record high in the past two weeks.

This means that without very strong funds continuing to buy Bitcoin, Bitcoin will remain below $20,000 for a long time.

Bitcoin is certainly bullish in the long term, but in the near term investors should be aware of the sell orders buried beneath the $20,000 level.

Perhaps, this stalemate between bulls and bears will continue for some time.