Bitcoin has been on an impressive rally over the past two months. From the $3,700 lows seen on March 13th, the asset has rallied over 150%. This 150% performance means BTC has outperformed basically any other multi-billion-dollar asset over the same time period. This strong surge to fresh highs hasn’t convinced everyone that Bitcoin is in a bull market though. Analyst “PlanB,” for instance, recently noted that Bitcoin is not yet in bull market territory as per the weekly relative strength index. Chart from “PlanB” The relative strength index (RSI) is described by Investopedia as “a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.” Though analysts say that if Bitcoin can breach the $10,500 level, it will decisively be in a bull market. Bitcoin Needs to Break Past $10,500 Bitcoin may seemingly move without rhyme or rhythm, but the cryptocurrency can be analyzed like the rest of the financial assets. One of the most common assertions analysts make when looking at the BTC chart is the importance of $10,500. The level held as crucial resistance twice and support once over the past year, while it also was in a region of importance during 2018’s bear market. Considering this, many analysts have made the assertion that $10,500 is the level to break to confirm a macro bull trend: “Breaking ~$10550 would confirm MACRO trend reversal. The first weekly higher high since Bitcoin hit an ATH in late 2017…” an analyst explained in rerefence to the chart below. Chart from crypto trader RookieXBT (@RookieXBT on Twitter) The importance of $10,500 has been echoed by another prominent trader. He explained that as long as Bitcoin remains under the resistance, he remains bearish on a medium-term time frame. The analyst is so bearish, in fact, that he believes the cryptocurrency is on track to plunge towards $2,000 in the coming year or two. It Won’t Be Easy to Break This Resistance While all bulls are gunning for $10,500, it won’t be easy for Bitcoin to break through it. One analyst recently shared the chart below. The chart is of BTC’s price action since the start of the year, coupled with the BTC/USD order book data from Bitfinex. The order book data shows that there is currently clear resistance at $10,000-10,300. This is notable as order book data from Bitfinex has marked notable moves over the past four months, the chart indicates. Should historical precedent hold up, BTC will find it extremely difficult to break past that resistance this time around. Chart from crypto trader Coiner-Yadox (goes by @Yodaskk on Twitter). Importantly, as the analysts aforementioned said, there will be serious upside for Bitcoin if it manages to surge past $10,500. But where this upside ends isn’t all too clear. Featured Image from Shutterstock
by Nick Chong on May 29, 2020 at 03:30PM
by Nick Chong on May 29, 2020 at 03:30PM
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