Bitcoin (BTC) finally managed to secure a new all-time high, but the digital asset rejected strongly near $20,000. On-chain analysts say a sell-off from whales and miners, combined with the $20,000 level acting every bit a resistance level caused a tearing drop.

BTC/USD 15-minute chart. Source: TradingView

What led whales and miners to sell Bitcoin?

For whales and high-net-worth investors, liquidity is the almost important cistron. Because they bargain with large orders, they need to calculate the slippage their sell orders will cause.

Typically, the best period for whales to sell is when in that location is top euphoria in the market place met with big buyer demand. This allows whales to more efficiently sell their holdings without causing massive volatility.

When the price of Bitcoin officially surpassed its best loftier on Coinbase, it acquired the marketplace sentiment to become highly bullish. Soon thereafter, whales started to sell, causing large liquidations across major exchanges.

CryptoQuant CEO Ki Young Ju explained that whale withdrawals were slowing down on Nov. 30. He said:

"I called curt-term bearish based on miner-selling, whale activity on exchanges, and no whale withdrawals. But I knew enough exchange stablecoin reserves would break $20k by this yr. If ATH rejection happens, information technology could exist a huge pullback as whales would sell BTC heavily."

The confluence of whales keeping BTC on exchanges, which means higher selling pressure, and the sell-off from miners amplified BTC's downturn.

Ki also noted that whales began to deposit Bitcoin into exchanges once once more, which happens when whales desire to sell their holdings.

Is the current recovery just a dead cat bounciness?

The price of BTC recovered swiftly after dropping to effectually $eighteen,200, surging dorsum above $19,400 within hours.

The speedy recovery likely occurred due to the nature of the drop. Equally the price declined, exchanges saw cascading long liquidations. As such, BTC likely dropped harder than it should have if it weren't for the large liquidations.

The recovery was as intense to the upside for that reason. Belatedly short-sellers could take gotten aggressive as BTC dropped, leading to a short-term short squeeze.

In the well-nigh term, Bitcoin could see two major scenarios. First, it could consolidate above $19,000, which would allow the derivatives market to detect sophistication and the open interest to rebuild.

Second, BTC could go on to drop as traders anticipate a accident-off height after achieving an best high.

Merely the macro outlook on Bitcoin still remains highly optimistic. Scott Melker, a cryptocurrency trader, emphasized that the monthly candle for November closed at BTC'south all-time high, which paints a positive long-term picture for BTC. He said:

"Last month closed right at the previous all time high monthly candle close. This month closed right at the all time high. Actually impeccable chart."

In the about term, the cardinal support levels for Bitcoin are $xviii,200, $17,700 and $xvi,200. There are even so large whale clusters in these areas, which could cause a reaction from buyers.