Bitcoin’s $17k Price Floor
At the time of writing, bitcoin is holding strong around $18k. Its 24-hour price range was $17.3k-$18.1k. Many investors are starting to play around with bearish scenarios as more and more hedge against a potential pullback. Bitcoin is building a strong price floor at $17k.
According to analysis from Edward Morra, Coinbase and Bitfinex exchange now have major buy orders above $17,200. The building of a buy wall is important because on November 18th we saw a flash crash to $17.2k. Seeing prices lower than $17.2k will become less likely as there are many buyers willing to gobble bitcoin at that price.
Apart from average investors, whales are again accumulating on the way up. According to Whalemap there are new clusters being formed at $17,651 and $17,783. Remember, whale clusters emerge when large bitcoin holders purchase at a certain price point and do not move those funds elsewhere.
Both whale clusters and exchange order books show that $17k is turning into a major support area. Heading to 20k becomes easier when passing $18.5k because there is little resistance.
Just because there are big buyers it doesn’t mean everyone’s out to buy. Volume by exchange has decreased recently, contributing to the weakening price action. At $1.79 billion, Wednesday was the highest volume day for major USD/BTC spot exchanges since way back on March 13, when volumes hit $1.98 billion the day after the “Black Thursday” crash. Today, daily volume was only $867 million.
This softening of buying activity is having investors use the derivatives market to protect their positions incase things so south. The bitcoin futures market is over $6 billion and the options market is over $4 billion. The CME has flirted with $1 billion in bitcoin open interest this week which is a good sign of institutional investors hedging crypto positions.
The best thing to hope for is a strengthening in support at $17.5k to provide a cushion in the case of a pullback.