The price of Bitcoin (BTC) rejected the $12,000 resistance level for the second time in the past 10 days. Traders are generally optimistic about the short-term trend of BTC, following its extended consolidation below a critical resistance level.<\/p>\n
When an asset stays relatively stable near a major resistance area, it typically suggests a bullish continuation is likely. It shows that sellers do not have enough pressure to push BTC down to a pivotal price point. Many traders seemingly anticipate the price of Bitcoin to remain in the $10,500$12,000 range. If BTC does not drop below a key support level at $10,500, technical analysts say that the bullish market structure will remain intact.<\/p>\n
The confluence of a positive global macro backdrop and a robust market structure are just some of the encouraging sentiments around Bitcoin, but investors have also expressed concerns about some short-term roadblocks facing it.<\/p>\n
The primary factor behind predictions for a bullish continuation of Bitcoin in the near term is its long-term market structure. Analysts say that the high time frame charts of BTC, like the monthly chart, indicate a clear breakout, with BTC escaping a prolonged price range that often leads to an extended rally, especially if the breakout occurs on a high time frame chart. Raoul Pal, CEO of Global Macro Investor, stated:<\/p>\n
Super early days for what is likely to be a very big move as institution finally follow what retail BTC investors have known all along that this is the future and its wildly under priced.<\/p>\n
Since its peak in 2017, when it almost achieved the $20,000 mark, BTC has ranged within a multiyear price range, bottoming out at $3,150 in 2018 while seeing a local high of $14,000 in July 2019 and establishing a three-year range. But when the price of Bitcoin recently surpassed $11,500, it confirmed on the weekly and monthly charts that the dreaded range has been broken. Various market data could also supplement the uptrend of Bitcoin over the longer term.<\/p>\n
Kyle Davis, co-founder of Three Arrows Capital, hinted that there is a small gap between $14,000 and $20,000 in the options market. Citing data from options exchange Deribit, Davis said, $BTC air above $14k up to $20k, which suggests that a breakout above $14,000 could fuel the next BTC rally.<\/p>\n
Some Bitcoin traders also emphasized that the current market structure of Bitcoin is highly optimistic. Scott Melker, a cryptocurrency trader, said that the absorption of Bitcoins dips shows that the trend of BTC is bullish: Its dip buying season and that any chance to grab a higher low is welcome. This is a bullish chart, period.<\/p>\n
In the four-hour price chart of Bitcoin published by Melker, Bitcoin recorded four higher lows, or four local low points that are higher than previous lows. A higher low pattern in technical analysis is considered a positive formation because it demonstrates strength from buyers. Every dip in the past 10 days was bought by Bitcoin buyers.<\/p>\n
The positive technical factors surrounding Bitcoin have been complemented by encouraging on-chain data points. According to on-chain market data provider IntoTheBlock, the number of Bitcoin HODLers has substantially increased:<\/p>\n
The HODLING trend for #Bitcoin continues. As can be seen in the graph below the number of $BTC hodlers has increased by almost 4 million within the last twelve months. As of August 9, a total of 20.47 million addresses were holding 11.51m BTC for over a year.<\/p>\n
In the short term, Bitcoin faces two obstacles: first, a historically relevant fractal, and second, a slight drop in liquidity. Both factors could impose selling pressure on Bitcoin in the near term, but compared to a few weeks ago, the overall sentiment around BTC remains positive.<\/p>\n
Nik Yaremchuk, a cryptocurrency trader, said that historical fractals hint at a short-term pullback. He compared the current price action of Bitcoin to that seen in May. Three months ago, BTC also saw a similar trend where the price looked to break out and then recorded a correction: We now have a fractal since May 2020, where we have been in range for a while, I do not think that we are here for long, but it seems to me that we will get another dip.<\/p>\n
The fractal coincides with a slight decline in the liquidity of Bitcoin. Market research firm Glassnode said that while the overall transaction rates of BTC are healthy, they declined slightly in the past week:<\/p>\n
Liquidity also saw a slight decrease, losing 3 points due to a drop in the transaction liquidity subcategory. This, in turn, was caused by the above-mentioned decrease in the number of on-chain transactions over the past week. However, overall transaction rates remain high relative to pre-bull market levels.<\/p>\n
Still, speaking to Cointelegraph, Denis Vinokourov, head of research at exchange and brokerage platform BeQuant, said that Bitcoin being rejected at $12,000 is not necessarily bad. The pattern of an upsurge followed by consolidation stabilizes the market and provides investors some breathing room:<\/p>\n
Price discovery and consolidation following a strong run up is an indication of a healthy two way market flow. Price rejection is not necessarily a bad development, as it gives market participants an opportunity to take stock of the situation and look to align the interest of both leveraged\/speculative flow and those of long-term holders.<\/p>\n
In the upcoming weeks, there are several variables that could affect Bitcoin and other major cryptocurrencies. The most prominent factor that might impact Bitcoin is likely the upward run of altcoins.<\/p>\n
In recent weeks, altcoins, especially in decentralized finance, have gained substantially against major cryptocurrencies. Band Protocols native BAND token and Chainlinks LINK, for example, rose by 348% and 88%, respectively,from Aug. 1 to their monthly highs.<\/p>\n
In the near term, whether profits from altcoins will flow into Bitcoin remains in question. Vinokourov noted that the willingness of the market to take on additional risk with altcoins demonstrates a positive market sentiment:<\/p>\n
Interestingly, year-to-date (YTD) the MVIS 100 small caps index is up 74.51% and large caps index is up 74.23%. Markets willingness to take on more risk, as evidenced in capital flow into small cap assets is a net positive overall.<\/p>\n
The combination of a favorable high time market structure and positive on-chain data has lifted the sentiment around Bitcoin in the longer term. But in the short term, some predict a minor pullback, which would make the market less overheated.<\/p>\n
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Bitcoin Price Keeps Rejecting $12K Heres What Can Happen to BTC - Cointelegraph<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The price of Bitcoin (BTC) rejected the $12,000 resistance level for the second time in the past 10 days. Continue reading