Bitcoin Closes on $12K but a Wall of Sell Orders Awaits: Analyst

Bitcoin is on the rise toward $12,000 but may face a stiff challenge to cross the price hurdle.

By Omkar Godbole

Oct 20, 2020 at 11:21 a.m. UTC

Updated Sep 14, 2021 at 10:11 a.m. UTC

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Omkar Godbole

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Bitcoin is on the rise toward $12,000 but may face a stiff challenge to cross the price hurdle.

The leading cryptocurrency by market value is currently trading near $11,900, a 1.2% gain on the day.
Prices broke out of a descending triangle on Monday, confirming a resumption of the rally from Oct. 8 lows near $10,500 and opening the doors for the psychological hurdle of $12,000.
"I expect bitcoin to reach $12,000," Patrick Heusser, senior cryptocurrency trader at Zurich-based Crypto Broker AG, told CoinDesk, noted in his analysis early Tuesday.
Crypto analyst Lark Davis believes bitcoin is now positioned for a notable rally.

CoinDesk - Unknown — Bitcoin 4-hour chart

However, a number of big sell orders positioned around $12,000 may make it harder for the bulls to engineer a quick move above $12,000.
"The supply wall is still looming at around $12,000. We are seeing roughly 1,000 BTC sitting on offer [sell orders] on Coinbase up to $12,000 (Bitfinex, Binance, and Coinbase together have roughly $4,000 BTC on offer up to $12,000)," Heusser noted.
That said, the underlying sentiment looks quite bullish if bitcoin can push past these offers.
The cryptocurrency has seen a steady price increase from $10,000 to $11,800 over the past five weeks despite negative news like the BitMEX charges, KuCoin's hack, the OKEx key drama, President Donald Trump's health scare and a stock market sell-off.
Further, the likes of the European Central Bank and the Reserve Bank of Australia are expected to ramp up monetary stimulus over the next two months – a long-term positive development for the perceived store of value assets like bitcoin and gold.
Traditional markets are also pricing in additional inflation-boosting U.S. fiscal stimulus.
Open interest in bitcoin futures listed on the Chicago Mercantile Exchange, considered synonymous with institutional interest, jumped by over 20% to a seven-week high of $624 million on Monday, according to data source Skew.
A rise in open interest along with a rise in price is often said to confirm an uptrend.

Open interest rose sharply from $364 million to $948 million in the four weeks to Aug. 17. During that period, bitcoin rose from $9,100 to levels above $12,400.
A break above the immediate resistance at $12,000 would shift the focus to the August high of $12,476.
"If we move below $11,200, I will start worrying about my long position and will reduce it," Heusser said.
Disclosure: The author holds small positions in bitcoin and litecoin.

Also read: Institutions Take Record Bullish Bets in Bitcoin Futures, Shrugging Off Exchange Missteps

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Omkar Godbole

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Omkar Godbole