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During trading on Thursday, less than a day after breaking through the $20,000 level, bitcoin reached $23,800. So the momentum, in less than 24 hours, was about 20%.
BTC
Now, instead of discussing when BTC will go below the $20,000 level, most traders have switched to another question. When will bitcoin break through the $25,000 level. The funny thing is that that level might be broken any given night. And we will find out in the fact over our morning coffee.
Let’s get to the bottom of this. Why was the first cryptocurrency standing under the level of $20.000 for so long, but after breaking through it, it rose sharply? The fact is that, as with the sharp rise from $10,000 to $19,000, speculators who played short uncovered helped considerably. They were forced to close positions in order to avoid margin calls. However, according to data from cryptocurrency exchanges, a huge number of margin calls did catch up with particularly stubborn traders. It was thanks to mass shorting that we saw the strongest momentum in BTC movement in the last 24 hours.
We are all expecting BTC to grow over the next 12 months. The problem is that we don’t know exactly when this growth will happen and when corrections will happen. What happens when all traders and investors wait for the same event? That’s right! The markets punish them by moving in the other direction.
So, looking up, you have to be mentally prepared for a strong correction, which even in 1 day can bring the BTC rate below the level of $20.000. Such correction is possible only on mass closing of speculators’ positions, standing in long positions with big leverage. That is a 100% identical situation that contributed to the current rise.
We should all be aware that an exit to absolute price highs is almost always accompanied by increased volatility. And be prepared for any development.
What awaits us today?
04.00 Bank of Japan interest rate decision
07.00 Bank of Japan press conference
14.30 Canadian Retail Sales in October
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