The price of Bitcoin (BTC) surpassed $50,000 for the first time in history across major futures exchanges, including Binance Futures.
However, on spot exchanges, like Coinbase and Binance, the price of Bitcoin rejected closely below $50,000.
BTC/USD 1-hour candle chart (Binance Futures). Source: Tradingview
Why more upside is likely
On Feb. 16, the price of Bitcoin reached as high as $49,556 on Coinbase, marking its second attempt at breaking past the $50,000 resistance area.
Shortly after hitting $49,556, BTC saw a steep pullback, declining by around 3.5% within several hours.
CryptoQuant CEO Ki Young Ju explained that Bitcoin’s struggle to break past $50,000 is about “Coinbase whales (USD) vs. Stablecoin whales (USDT).”
Coinbase premium index. Source: CryptoQuant
Ki emphasized that there was a negative Coinbase premium at the time Bitcoin rejected $50,000 in the morning. For BTC to cleanly break past it, he explained that the negative premium has to be “cooled down.”
Since the initial rejection, the Coinbase premium has stabilized, reaching parity with Binance’s Tether price.
Coinbase typically has a higher Bitcoin price than Tether on most days, but the premium has recovered from negative to neutral.
U.S. session could result in newfound momentum
With the Coinbase premium recovering, Lex Moskovski, a quant trader and a cryptocurrency investor, said the U.S. session could catalyze Bitcoin’s new rally.
Theoretically, the Coinbase premium should return during the U.S. session, as buyers in the U.S. would be more active during market hours.
Hence, if the premium returns as the U.S. market opens, the probability for the continuation of a Bitcoin rally would increase. Moskovski said:
“This run up to $50k keeps being dominated by buying pressure from Binance and others as opposed to Coinbase. This is indicated by a decreasing Coinbase premium. However, this may also mean that Coinbase buyers join the race when the U.S. wakes up. Let’s see.”
Furthermore, popular pseudonymous cryptocurrency trader Mac said Bitcoin is likely to surpass $50,000 and build a new support area.
The trader said a potential scenario would be BTC rising above $50,000, correcting to around $42,000, and establishing a new support level. He said:
“New base about to be built on $BTC This is the ideal scenario in my books. With the current state of the market we might tap $52k, continue consolidating and go higher.”
Potential Bitcoin scenario. Source: Twitter @Macnbtc
Generally, both traders and on-chain analysts seemingly anticipate the price of Bitcoin to surpass $50,000 in the near term.
However, with the funding rate indicating an overcrowded futures market, traders expect Bitcoin to correct shortly after reaching $52,000.
If this scenario plays out, it would be akin to BTC’s reaction at $42,000 when it first broke above it. This was followed by a sharp correction to around $29,000 before the price rebounded to new highs.
Title: Bitcoin futures break $50K: Why BTC price is primed for another leg up
Sourced From: cointelegraph.com/news/bitcoin-futures-break-50k-why-btc-price-is-primed-for-another-leg-up
Published Date: Tue, 16 Feb 2021 11:00:00 +0000