Traders are becoming wary of Bitcoin’s price after repeated rejections to the $11,500 level after the recent rise.
After the Bitcoin price (BTC) reached $11,720 at Binance, traders started to become slightly skeptical about the dominant cryptomone currency. Despite the initial break above two key resistance levels at $11,300 and $11,500, BTC recorded several rejections. While it may be premature to predict a correction across the market, the level of uncertainty in the market appears to be increasing.
In the short term, traders point to the $11,200 to $11,325 range as a critical support area. If that region holds, technical analysts believe that a significant drop in prices is unlikely. But if Bitcoin shows a weakening of momentum below $11,300, the market would likely become vulnerable. Although BTC’s technical momentum has been waning, traders generally see a wider support range of $10,600 to $10,900.
Considering the series of positive events that have driven the price of Bitcoin in recent weeks, a short-term reversal could be healthy. On October 8th, Square announced that it bought $50 million of BTC, reportedly 1% of its assets. Then, on October 13th, it was reported that Stone Ridge, the $10 billion asset manager, invested $115 million in Bitcoin. Market sentiment is very optimistic as a result, and a sale to neutralize market sentiment could be positive.
Traders expect a period of consolidation
Crypto traders and technical analysts are cautious in the short term, but not bearish enough to predict a clear peak. Bitcoin has been below $11,500, but has also risen 5% so far from $10,800. At the monthly peak, BTC recorded a gain of 8%, which is relatively high considering the short period. Therefore, although Bitcoin’s momentum has slowed in the last 36 hours, it’s difficult to predict a major setback.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, sees a healthy trend underway in the broader cryptomoney market. The trader noted that BTC could see a drop in the support range of $10,600 to $10,900, but the combined market capitalization of cryptomonies is clearly on the way to a prolonged upward rally, he said, adding, „Very healthy construction is underway here. A higher rise was made after a higher fall was created. Just another reach period before the break over $400 billion. The next target areas are $500 and $600 after that. But a very healthy upward trend.
Edward Morra, a technical analyst at Bitcoin, cited three reasons for a decline to the $11,100 level, noting that BTC reached a significant „daily supply“ level when it rose to $11,700. This means that there was significant liquidity, which was also an important resistance level. Morra also said that the 0.705 Fibonacci resistance and the „weekly pivot R1“ make a fall to $11,100 more likely in the short term.
A pseudonymous trader known as „Bitcoin Jack“, who accurately predicted the $3,600 fund in March 2020, believes that although the current trend is not bearish, he is not ready for a continuation either. BTC rejected the $11,500 to $11,700 range and has been trading below $11,400. It said it is likely to increase its positions once an upward price movement becomes more likely. The trader added: „He has been reducing somewhat on the rebounds – not very convinced after the two rejections on the two lines above the price. It will be added again as continuation becomes more likely.
Although traders apparently anticipate a small price drop in the short term, many analysts are refraining from anticipating a full-blown rejection. The cautious stance of most traders is probably the result of two factors that have been consistently emphasized by analysts since September: the strong 15.5% recovery of the BTC in just 19 days and the little resistance above $13,000.
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Resistance above $13,000
Technically, there is no strong resistance between $13,000 and $16,500. Because the Bitcoin rebound in December 2017 was so fast and strong, it didn’t leave many levels that could act as a re