Bitcoin explodes above $23,000: What top analysts now think is possible
The bitcoin price (BTC) has managed to cross the $23,000 mark, shortly after breaking through its all-time high at $20,000. As the dominant cryptocurrency now enters price discovery, analysts are forecasting short-term trends.
In the short term, Bitcoin’s outlook remains obviously optimistic. There are no historical resistance and support levels above $20,000, so it Bitcoin Bonanza remains uncertain how far BTC can rise until the next top.
However, analysts identify three trends that could emerge as a result of BTC’s strong rally overnight
Massive volatility is coming – both down and up
Bitcoin has been moving up quickly over the past 48 hours. This means order books are thinner and volume is higher.
A pseudonymous trader known as „Bitcoin Jack“ explains that the BTC price „can cascade viciously up and down“. The trader:
„Liquidity is so dry that you can clear the sell side on Bitstamp with a buy order of <650 btc lol. Obviously sellers are stepping in, stops etc, but what I’m trying to say is that the books are super thin again after this recent push, price can cascade up and down viciously.“
Massive price swings are increasingly likely due to higher open interest and rising whale inflows.
Open interest refers to the total sum of all active futures contracts in the market. The higher the open interest, the more traders are betting on the price of BTC in the futures market.
According to CryptoQuant data, aggregate open interest on major cryptocurrency exchanges has reached an all-time high. When open interest on futures exchanges skyrockets, the likelihood of a massive volatility spike increases.
The chances of cascading liquidations are also increasing, which could lead to increased upside or downside within a short period of time.
Altcoins could have a tough time
Alternative cryptocurrencies (altcoins) thrive when bitcoin stagnates or consolidates.
Investors are starting to look for riskier and more volatile plays to make up for the lack of volatility in the bitcoin market. But when BTC starts to rise by 10-20% in a single day, it sucks the volume and volatility out of the cryptocurrency market.
In the foreseeable future, this could mean that altcoins are likely to struggle against bitcoin. A pseudonymous trader named „Loma“ commented:
„BTC ~10% up and a sea of red for most ALTBTC pairings… Either be in bitcoin or try your luck with an outperformer. The game is still strong Bitcoin imo ALTs will have their time but opportunity cost is a real thing.“
Even most large-cap cryptocurrencies like Ethereum and XRP, which performed strongly during Bitcoin’s November rally, have underperformed in recent weeks.
Until Bitcoin stabilises and establishes clear resistance and support levels, altcoins have a higher chance of stagnating against Bitcoin.