Bitcoin aggressively soars, is it headed to break at $40K? – CryptoGo!

Bitcoin aggressively soars, is it headed to break at $40K?

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This year has been a great year for Bitcoin, and it recently attained a new high of $25,945 on boxing day, just a day after it got another new high on Christmas day.

Several reasons may be behind the bitcoin price rally, one of the main ones being increased demand from institutional investors. The recent bullish trend is associated with an increased shorting on Binance Futures.

Disruption of Bitcoin futures

Before the current upsurge, many traders had taken the route to short bitcoin across futures exchanges. This made short sellers sell close to the previous high price leading to a short squeeze. This broke the high record, making BTC surge since bitcoin officially entered a price discovery phase.

From records from Bybt.com, approximate $131 million bitcoin futures contracts were liquidated in a day. When the derivatives market experiences an increase in the number of sellers, short squeezes also increase.

The current rally has increased the price of Bitcoin above the stock-to-flow model line, which has predicted bitcoin will hit $100,000 by the end of 2021.

What does the future hold?

Many Bitcoin investors are happy with the bitcoin price trend despite the high volatility. The rally has pushed the number of big sellers down as it has been experienced on Coinbase.

On Coinbase, big investors with more than 1000 BTC wallets have taken a chill, while the number of small wallets of less than 1000btc has also decreased in the past week. On the flip, 1-10BTC wallets have been on an aggressive climb during the same period. That shows that many retail buyers are jumping on board during this Christmas season.

Most traders are not keen on shorting Bitcoin as they are expecting a clear top. Another short squeeze will push the price even higher.

According to Cointelegraph Markets Analyst Michael van de Poppe, Bitcoin may exceed the $40,000 in the next impulse wave.

Bitcoin institutional demand

There is a rise in the number of institutional investors that are now switching to Bitcoin. The big shots include JP Morgan, Bloomberg, Citibank, Fidelity, etc.

Bitcoin correction can only remain low when there is a drop in institutional investors’ demand and trading volume. That means that there will be a decline in Bitcoin volatility when the institutional buying of bitcoin declines.

Image by Andre Matthews from Flickr.

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Bitcoin aggressively soars, is it headed to break at $40K?