Bitcoin is approaching its historical peak, but there is still an area of resistance that buyers must overcome.
Bitcoin traders (BTC) are identifying order books from major exchanges that show the USD 19,500 level as a short term resistance level.
Bitcoin Rejects USD 19,500 for Now
On November 25, Bitcoin’s price was rejected at USD 19,500 with relatively large volume on the major spot exchanges. At Binance, for example, the BTC price reached USD 19.484 before seeing a slight decline to less than USD 19.300.
The lower rejection probably occurred because of the piles of sell orders between USD 19,450 and USD 19,550.
A popular trader known as „Byzantine General“ shared the order books of all the major exchanges that showed USD 19,500 as a key area for sellers.
Vijay Boyapati, a Bitcoin researcher, similarly said that the USD 19,500 to USD 19,550 range remains the last wall of sales before a new historical peak.
If Bitcoin does not test the $19,500 range again in the next few hours, this could mean that another drop is likely. Considering that it would be the last resistance to the new historic peak, traders expect some reaction from sellers.
Another small setback would benefit Bitcoin because it would further neutralize the futures funding rate of Wealth Matrix. The BTC futures funding rate has once again risen to 0.07% at Binance Futures and other exchanges.
Given that Bitcoin’s average funding rate is 0.01%, another short-term drop to restore the derivatives market may even strengthen the upward momentum.
Short contracts at levels not seen since April is a relevant variable
However, one variable to consider is that the number of short contracts in the Bitcoin market is at its highest level since April 2020.
In March, the price of Bitcoin fell below USD 3,600. Subsequently, it continued to rise, eventually exceeding USD 19,000. The rally accelerated in April when short contracts reached an annual high.
The probability of a short term bearish contraction increases as the number of short term contracts in the market increases. A small downward contraction occurs when the price of an asset continues to rise despite the presence of significant selling pressure.
This trend causes short sellers to buy their market positions, which drives increased market demand for purchases. An analyst known as „Cactus“ wrote:
„BTC’s short contracts are at the highest point since April 2020…“
If the number of short positions continues to rise, it would also cause a drop in the futures funding rate. In some ways, this could make the rally more sustainable in the medium term.