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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis

November 23, 2020
The weekend trading session saw Bitcoin almost print a $19,000 handle. Sellers arrived just in front of our $19,050 resistance level as long term holders continued to take profits.

The weekend trading session saw Bitcoin almost print a $19,000 handle. Sellers arrived just in front of our $19,050 resistance level as long term holders continued to take profits.

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We may have a great story to validate the rise in Bitcoin side its mid-March implosion (remember that?), but the real story of this rally is beautifully laid out by on-chain data.

Let us start with available supply.

Since mid-February we have witnessed a continued reduction in exchange balances, which is unlike any transfer we have seen historically. Bitcoin continues to leave exchanges at pace, with no signs of slowing. The sharp drop of balances held on Bitmex makes for an interesting viewing.

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…But this is not the case with all exchanges. Coinbase, Gemini, and Binance, shown below, are not seeing the same outflows.

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However, across all exchanges, the picture is clear. Bitcoin balances are leaving exchanges at a pace we have never seen.

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So where is it going?

Answer: North America.

You can see from the graph below, since Covid-19 hit, the transfer of Bitcoin from Asia to North America has been dramatic. Paul Tudor-Jones and Michael Saylor are just the tip of the proverbial iceberg.

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This break higher in Bitcoin prices has been accompanied by an increase of the number of wallets with a balance of over 1,000 BTC. The chart at the top of this report shows the long term holders selling, and we know where that BTC is now sitting.

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Coins are being transferred from old money to new whales, and where that isn’t happening, they are disappearing from the liquidity pool and heading into privately held and custodian wallets.

Hodlers are selling, new money is buying, and popular retail exchanges are seeing steady Bitcoin balances.

Is this a signal that we should be cautious? Or does it show conviction?

I’ll end with the below chart. It shows the funding rate for perpetual contracts. In the last week, the demand has driven funding rates up to 0.087% — it quite literally pays to be short. Is this a sign of overheating, or is this the prerequisite to liquidations if the market moves back towards, and to new, all-time highs?

We will probably find out very soon.

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During the weekend trading session, Bitcoin stopped just short of our $19,050 resistance level after breaking up above $18,265. Today, despite printing new yearly high of $18,890, we find ourselves back once again to the $18,265 level.

The strategy remains the same: As long as we are holding above $18,265, the prospect of new multi-year highs remains front and center of traders’ minds. $19,050 will be the target the bulls need to retest and break to open the final push.

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On the downside, a clear move below $18,265 will take us down to $17,890. It’s likely this area is well defended as the bulls look to cement the higher trading range. A break lower will lead us to test support at $17,130.

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