The prior week had been quite eventful for the first and largest cryptocurrency by market cap, Bitcoin (BTC). In a spectacular move, Bitcoin surged from $11,300 to $13,300 gaining $2,000 within a week. Bitcoin in the process breached past the $12,000 level to trade at new yearly highs of $13,250.
After this breathtaking move, Bitcoin keeps retesting the $13,000 key level but is yet to achieve concrete success. Formidable support kept the selling pressure in check while bulls eye the ultimate lift to $14,000.
$14,000 is significant as it was noted as the point at which Bitcoin’s December 2017 candle closed and also the peak of Bitcoin’s uptrend in mid-2019.
Bitcoin’s recent uptrend may have hit a pause but the arguments for a continuation of the bull market are lining up. As the entire crypto market awaits Bitcoin’s next price move, analysts explain why Bitcoin (BTC) climbing to $14,000 would cause a shift in market dynamics.
BTC/USD Daily Chart
Bitcoin is presently trading at $13,034.
Why Bitcoin (BTC) Next Price Move Would Cause a Shift in Crypto Market Dynamics
The reason why Bitcoin hitting $14,000 in this present market cycle may be quite significant is since little futures volume has been traded above $14,000. This may be attributed to the fact that before and during 2018, BitMEX and other perpetual swap platforms did not have that much interest, as there was enough leverage as is longing Bitcoin or Altcoins through spot markets.
An analyst also noted despite Bitcoin’s $2000 surge in the prior week that almost no one in the present derivatives market ever traded meaningfully above the recent level.
With derivatives now believed to impact Bitcoin’s spot price, the introduction of a whole new price range to derivatives traders could lead to increased volatility. Also, Bitcoin having interacted with the $14,000 a couple of times in its short span history may signal that this time will be quite different from a shift in market dynamics.
Crypto analyst Qiao Wang opined that once Bitcoin breaches $14,000, the crypto market will see a “different regime in terms of volatility, momentum, retail participation, and so on” he however didn’t go into details as to which crypto market trends will be impacted. This he stated:
“Once BTC breaks $14k, we’ll likely be in a different regime in terms of volatility, momentum, retail participation, and so on. A lot of things that worked last few months may no longer work and vice versa. $20k will take this regime to a whole new level. Just a hunch. We’ll see.”