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Bitcoin Price Analysis: BTC Faces Repeated Rejection At $24,000 Resistance Line

6 Min Read
Last Updated March 25th 2021

Daily Bitcoin BTC Price Forecast

  • Bitcoin sits on top of a stack of healthy support.
  • MACD in the 4-hour time frame is about to reverse from bearish to bullish.
  • 100k Bitcoin options are set to expire on Christmas

Bitcoin bulls took back control of the market this Tuesday. However, the price faces repeated rejections at the $24,000 psychological level. It seems like holders are selling off their coins the moment they reach that level.

 

Bitcoin Fails At $24,000-level

Between 12th and 19th December, the premier cryptocurrency went through a legendary rally wherein it rose from $18,000 to $24,000. However, a rejection at the $24,000 resistance barrier forced the price to drop to $22,675 before it bounced back up. Unfortunately, it appears like the price is going to drop again following another rejection.

btc/usd  daily chart 122320

Image: BTC/USD daily chart

The price is currently sitting on top of healthy support zones, which is an encouraging sign for BTC holders. There is strong support between $23,000 and $23,300, which should absorb a lot of selling pressure. Below that, the 20-day SMA should be robust enough to absorb the residual selling pressure.

bitcoin volume chart 122320

Image: IntoTheBlock

The 4-hour chart should be encouraging to the holders. It seems like the short-term market momentum is on the verge of reversing from bearish to bullish.

btc/usd  4-hour chart 122320

Image: BTC/USD 4-hour

 

Argentina Turns To Bitcoin As A Hedge

As Argentina's financial crisis worsens, people are increasingly turning to cryptocurrencies as a hedge against bad public policies. Maximiliano Hinz, Binance’s director of operations for Latin America, said that the number of new Argentinians operating in Binance is five times higher today than in 2019.  

Considering all the service providers, the Latin American team at Binance estimates that the number of new cryptocurrency users in Argentina has tripled this year. A Télam report cited: 

From January to today, the number of Argentinean users in Binance has multiplied by five. But this was not the case in all platforms. If we talk about a market average, we could say that the number of users grew by 300% this year. 

Hinz said that although the pandemic played an important role in the surge of interest in cryptocurrencies, the spark was already burning for quite some time. He mentioned that bad public policies have taken the country to a crisis level that is only surpassed by Venezuela’s. 

Hinz added that Argentines have a particular preference for fixed-term investments in digital assets. Télam explains that one of the choices favoured by Argentinian investors is deposits with assured profitability of 6% per year in dollars, with deposit options from seven days to 90.

 

David Rosenberg Calls BTC A Bubble

Analyst David Rosenberg has claimed that BTC is trapped within a bubble. Rosenberg said that most people investing in Bitcoin now are only doing so because of the coin’s popularity and that most investors know nothing about the asset. 

According to a Live Bitcoin News report, Rosenberg said: 

You speak to most people that are asking me to put money in bitcoin, they can’t even tell you who the person was that developed it or even how it’s mined. It’s just a classic, follow-the-herd, extremely crowded trade. It’s in a massive bubble.

Rosenberg also seems to have an issue with Bitcoin’s overall supply. Bitcoin only has 21 million units in existence. Currently, around 18.5 million have been mined. This means that just over two million are left before the BTC supply runs out. Rosenberg doubts if this figure of 21 million will be a final mark given that there are possible methods to expand this number somehow should it ever be hit.

He seemingly implied that anybody could potentially create more Bitcoin, thereby making this 21 million moot in the future. He mentions: 

Everybody seems to believe that we’re going to get to that 21 million cap on the supply constraint, but there’s really nothing in the protocol to suggest that the supply of bitcoin can’t go up once we hit that limit.

Rosenberg isn’t the only Bitcoin critic. Other people who are doubtful of Bitcoin’s prowess include billionaire investor Mark Cuban. In a recent statement, Cuban suggested that while Bitcoin is investable, it is not the hedging tool widely perceived. 

 

100k BTC Options Are About To Expire – More Volatility Ahead?

On December 25, around $2.3 billion worth of Bitcoin futures is set to expire. This has caused the community to expect a volatile week in the cryptocurrency market. Data provider Skew recently tweeted that 102,200 Bitcoin (BTC) options will expire on Friday. 

Options contracts let holders purchase or sell BTC at a specific price known as the strike price. According to Skew, the Friday expiry has notable clusters around the $15,000 strike price and the $20,000 strike price. 

The expiry date of Bitcoin options contracts is widely regarded as a volatile event for the flagship cryptocurrency. This is because as the expiry nears, holders adjust their contracts. Traders who are in profit may also decide to receive the payout and dump the cryptocurrency. 

Such events have been known to cause large fluctuations in Bitcoin’s value. Typically, the impact of a contract on BTC price becomes more apparent a couple of days before expiry. 

Bitcoin is currently in the midst of a significant bull market, which is being fueled in part by institutional investors and large over-the-counter trades. 

Even with the anticipated futures volatility, there appears a good chance that BTC will remain well supported by institutional demand and the rise of illiquid wallets. 

 

Key Price Levels To Watch

Currently, all eyes will be on the  $23,000 and $23,300 support zone. This area needs to hold firm for the holders to retest the $24,000 resistance barrier. A break below this will take the price to the 20-day SMA.

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