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Here’s How High Bitcoin May Rally Before Losing Steam

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  • Bitcoin’s price has been showing signs of strength as its consolidation phase continues
  • Although its upwards momentum has faltered, its current stability within the mid-$11,000 region is promising, as it points to some underlying strength amongst bulls
  • Where the cryptocurrency trends in the near-term will likely depend primarily on its reaction to a couple of key levels
  • One analyst is noting that a strong upside movement could be imminent in the near-term
  • That being said, he still thinks the resistance seen throughout the upper-$11,000 region could be enough to spark a selloff

Bitcoin and the aggregated crypto market have struggled to garner any strong momentum throughout the past few days.

This consolidation has come about closely after the series of strong moves that helped lift BTC from $10,400 to highs of $11,700.

The resistance between $11,600 and $12,000 is quite intense, and Bitcoin’s inability to break above this price region thus far indicates that it may continue holding strong.

One analyst does believe that a test of this region could be imminent, setting his sights on a move up to highs of $11,800.

He stated that it might see a rejection here that causes it to plunge back towards the lower-$11,000 region.

Bitcoin Continues Consolidating as Overhead Resistance Grows Heavy 

At the time of writing, Bitcoin is trading up just under 1% at its current price of $11,550. This marks a notable surge from early morning lows of $11,400 set just a handful of hours ago.

BTC is trading just a hair below where its resistance zone first begins, and $11,600 has sparked multiple rejections as of late.

Even if bulls can surmount this level in the near-term, the resistance between $11,600 and $12,000 may suppress its upwards momentum.

Analyst: BTC May Tap $11,800 Before Plunging Lower

One trader believes that today’s slight push higher may extend all the way up towards $11,800.

He believes that this region contains enough selling pressure to slow its ascent and possibly even cause it to plunge towards $11,200.

“BTC: Think we get some upside here tbh. Poor highs above. Could offer some nice short entries imo ~ still at HTF resistance.”

Image Courtesy of George. Chart via TradingView.

If Bitcoin can muster up enough support to break above the region between $11,600 and $12,000, it could be in for some massive gains in the near-term.

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Charts from TradingView.





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Bitcoin

Bitcoin Must Consolidate Above This Key Level, Or Risk Plunging to $11,900

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  • It has been a wild past few days for Bitcoin and the aggregated cryptocurrency market
  • Bitcoin has been able to post consistent gains throughout as of late, with buyers and sellers largely reaching an impasse following its slight rejection at $13,200
  • This has created a slight consolidation phase around $13,000 that it has been caught within throughout the past two days
  • If this phase persists in the near-term, BTC must continue holding above $12,800
  • One analyst noted that a break below this level could open the gates for a move down to lows of $11,900

Bitcoin and the aggregated cryptocurrency market have seen a roller-coaster week, with Bitcoin’s previous weakness being fully erased by bulls who sent it surging to fresh yearly highs of $13,200.

This move’s intensity has sparked a sense of euphoria and hope amongst traders and investors, with may expecting further upside in the days and weeks ahead.

For this to come to fruition, bulls must continue defending against a break below $12,800.

One analyst noted that a break below this level could open the gates for BTC to see a sharp decline down towards $11,900.

Bitcoin Struggles to Gain Momentum as Selling Pressure Mounts 

On a short-term scale, Bitcoin’s momentum is faltering slightly due to some heavy selling pressure within the lower-$13,000 region.

Until it can break above this region, there’s a possibility that a retrace could be imminent in the near-term.

At the time of writing, Bitcoin is trading flat at its current price of $12,985. This is around the price at which it has been trading for the past couple of days.

Each selloff has been aggressively absorbed by bulls, which is a positive sign.

Analyst: Here’s the Crucial Defense BTC Needs to Defend

While sharing his thoughts on Bitcoin’s present technical outlook, a popular crypto-focused analyst and trader at the Amsterdam Stock Exchange noted that $12,800 is the key support level to watch in the near-term.

He contends that a defense of this level could lead BTC towards $13,500, whereas a rejection could cause it to drop towards $11,900.

“Bitcoin: As long as $12,750-12,800 holds, I think $13,500 is next. But if it doesn’t hold as a pivot, I assume the price drops further down toward $12,200 and potentially $11,900.”

Image Courtesy of Crypto Michael. Source: BTCUSD on TradingView.

How the entire market trends in the months ahead will depend on Bitcoin. This makes it vital for BTC and altcoins investors alike that the benchmark crypto maintains its newfound momentum.

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Charts from TradingView.





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Top traders say Bitcoin log chart points to a 2017-style BTC bull run

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Peter Brandt, a well-regarded veteran trader, recently emphasized the high demand from institutions as a key catalyst for Bitcoin’s strong performance.

BTC/USD 1-month chart. Source: TradingView

The strong high time frame technical structure of BTC, especially the weekly chart, and the strengthening fundamentals are buoying the market sentiment. In a tweet, Brandt posted the above chart and said:

“Bitcoin—IF the current gains hold through end of Oct—is poised for the second-highest monthly close ever. $BTC Institutions are increasingly involved in Bitcoin ownership. Institutions mark the value of their assets monthly.”

In addition to the rise in trading volume and growing institutional appetite, investors are referring to the logarithmic chart to forecast a broader rally.

Raoul Pal focuses on the Bitcoin log chart

The log price chart is the most widely used scale by most technical analysts. A logarithmic chart simply means a chart that represents common percent changes with equal spacing in a scale.

Raoul Pal, the founder and CEO of Real Vision Group, says Bitcoin’s monthly log chart is highly optimistic. He wrote:

“Its a bitcoin kind of day. The monthly log chart with regression lines is really something to behold. One of the nicest, post powerful chart patterns I’ve ever seen.”

The technical reason behind the optimism towards the monthly log chart is mainly its clean breakout. Throughout the past four years, $13,000 has acted as a heavy resistance level.

The historical log chart of Bitcoin. Source: Raoul Pal

As such, on high time frame charts, like the weekly and the monthly chart, BTC always closed below $11,000, except for 2020.

Bitcoin’s clean technical breakout on the monthly timeframe is leading traders and investors like Brandt and Pal to make strong bullish calls on BTC’s price action. As Pal said, “if history rhymes, 2021 is going to be a BIG year.”

BTC/USD 1-month chart. Source: TradingView.com

Q4 2020 may end on a positive note

Apart from the numerous bullish technical and fundamental catalysts, the timing of the current rally is also in favor of a major Bitcoin bull cycle.

Bitcoin quarterly returns in percentage. Source: Skew

According to data from Skew, Bitcoin had not had three positive consecutive quarters since 2017. During that year, BTC reached its all-time high at $20,000 following its second block reward halving in 2016.

Bitcoin could possibly be on track to record a massively positive gain in the fourth quarter if it stays above $12,000. If so, that could lead to the same bull cycle pattern as 2017. Next year would also present the same post-halving cycle BTC saw in 2017, which further strengthens the narrative of a newfound bull cycle.