Today, BTC is tracing back the recent gains, going to the $17,400 level. A pullback has long been expected as Bitcoin has been surging since early October when the price was around $10,500.
For the last six weeks, the digital asset has been printed green candles, and this week, we might finally end up seeing some correction. However, BTC/USD is currently trading above $17,900 at the time of writing.
“We’re overextended here and due for a pullback,” Vijay Ayyar, head of business development with crypto exchange Luno told Bloomberg.
“Anywhere from between $18,000-$19,000 is potentially a top. We should have many people selling at these levels, especially those that bought at the top in 2017-18. Major rallies in the past always had 30-40% corrections. No reason to believe this time is different.”
Red in the Bitcoin market has the majority of the altcoins recording losses as well, with a few notable exceptions like FOAM (+90%), YFI (10.4%), and WAVES (7.6%).
Reaching for those highs
This week Bitcoin had a wild run as the leading digital asset went from $15,750 to nearly $18,500. With this, on Wednesday, the highest number of bitcoin addresses were created since January 2018.
Additionally, this uptrend saw the volume across the board, climbing to new highs. The leading spot exchange Binance recorded a new all-time high in its volume, as shared by its CEO Changpeng Zhao.
Yesterday, the real volume also surged above $6 billion, as per Messari. Even crypto exchanges went off as usual as the digital asset made some big moves.
However, on-exchange trading volumes are still below prior levels, “indicating that retail investment in the space has not yet returned in force.”
“I don’t see this move as a mania or grossly over-loved just yet,” wrote Chris Weston, head of research at Pepperstone Financial Pty.
Still Far Off
While volume hasn’t made new highs, the aggregated open interest in the BTC futures market has done so at $6.4 billion, in USD terms, that is.
However, in terms of Bitcoin, the open interest is far from the ATH — trailing at around 390k BTC, below the yearly average of 395k BTC.
On CME as well, the open interest surpassed the $1 billion mark.
Comparing the current market condition with that of the last bull run, analyst PlanB noted,
“Big difference with 2017 is that most BTC sold today will never see the daylight again, they disappear into deep cold storage. Buyers today are professionals with long term vision and staying power.”
As we reported, Chinese state media also shared bitcoin’s bull run with the people noting that the bull run of 2020 is institutionally driven in a more developed ecosystem.