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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis

December 15, 2020

The resistance at $19,445 persists. During the 2020 rally, Bitcoin has spent just 48 hours trading above this level. A brief attempt at a new high was met with profit taking.

We can see from the chart below that large holders with wallets in excess of 100 BTC have sold assets into strength.

We have long been tracking the decline in exchange balances, but whether or not this supply factor has any weight when predicting price behavior is open to interpretation. With the derivative market now three times greater than that of the spot market, you don't need to actually buy or sell 'physical' Bitcoin to drive price movements, you just need capital.


So instead of chart depicting the decline in balances, which still looks very supportive of price from a supply standpoint, I thought it was a good moment to highlight the net flows to exchanges: Bitcoin in vs Bitcoin out. As you can see from the chart below, it was one-way traffic from August, up until the rally really took off. Since then, the 30-day moving average has been climbing and Bitcoin is returning to exchanges, negating the flow of coins leaving. We are very nearly back in positive territory.

So who is buying? Well, the retail crowd are still hoovering up Bitcoin, buoyed by the headlines, facilitated by PayPal. The total number of wallets with greater than 1 BTC is back on the rise.

Your first thought might be: "So retail is buying coins from those selling from wallets containing 100 BTC or more?" and your second thought may be: "This isn't good news," but it's worth remembering that Bitcoin isn't about 1 person owning 100 BTC, it's about 100 people owning 1. Long term, the value is in the network: The more people who own, use, and believe in Bitcoin, the bigger the network becomes.


The supply that feeds that network is finite. I'll let you do the math.


...And while we're on the subject of math...

The total USD value of negative yielding debt just hit $18 trillion.


The pandemic has decimated economies globally. Quantitative easing and stimulus may ease the headache today.


Unfortunately for us all, this headache is turning into a migraine.


Technical Analysis

Support at $19,050 is holding firm again today and Bitcoin is attempting yet another climb past $19,445. So far, it's stalemate, with neither bulls nor bears able to take control of the market.


Should we break up through $19,445, I would expect a quick move higher to $19,891 to follow. Pent up demand will likely return to the market at the first sign of a break from the recent trading range. This could propel us past the $20,000 mark in one swoop.

On the downside, a move below $19,050 will provide more frustration for the bulls. $18,640 will be the immediate focus for the bears, with $18,265 the likely brake on any move lower. The market is set for a move. With a tight $400 trading range waiting to be broken, this next move is likely to find momentum.

The Market in Numbers

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