Arcane Research: Bitcoin to hover between $16,000 and $18,000 ahead of breakout above $20,000

After a solid rise in October–November, Bitcoin’s price could hold in December in the $18 000–20 000 range with a likely test of $16 000. This would be a “healthy pullback” before further gains, according to Arcane Research.

📈Highest #bitcoin volume in 2020📈

We have seen a massive increase in the bitcoin volume over the past month, surpassing the highs from March and May.

Read more in our weekly market report: https://t.co/piGbUmtUZn pic.twitter.com/B0yTmNgASP

— Arcane Research (@ArcaneResearch) November 10, 2020

A continuation of the rally, should the above-mentioned scenario be invalidated, would be possible if the weekly candle closes above the $19 400 level, according to analysts.

Data: Arcane Research.

The higher probability of a consolidation move is underpinned by the Fear & Greed index hovering near its all-time high of 95 for the past month. Previously, this had signaled profit-taking on long positions.

Data: Arcane Research.

Another such indicator is record-high trading volumes on spot exchanges as Bitcoin hits its all-time high, and their subsequent pullback.

Data: Arcane Research, skew.

Long-term prospects for the first cryptocurrency remain favorable. The aggregate balance of bitcoins on exchange wallets resumed its decline, breaking below 2.4 million coins. The metric fell by 575,000 BTC, or 19.5% from its peak.

In November, analysts noted that the ratio of bitcoins on exchange balances to the circulating supply reached its lowest level since February 2018.

Data: Arcane Research, Glassnode.

Analysts note that futures premia have halved after gains in the previous weeks. Arcane Research considers this a sign of less active bullish positioning, which reduces the risk of mass liquidations.

Data: Arcane Research.

Another such signal was the return of the funding rate to neutral levels. At its peak on 24 November, the indicator jumped to 0.1% per hour, indicating enthusiasm among traders using borrowed funds.

Data: Arcane Research.

Earlier, CryptoQuant’s Ki Young Ju predicted that the return of Bitcoin whales to selling would push the $20,000 breakout to year-end.

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