Bitcoin’s price action throughout the past 24-hours has been incredibly positive for bulls, as the crypto is now consolidating below its crucial resistance as buyers take aim at catalyzing further upside.
In the near-term, it appears that where BTC trends next may depend almost entirely on its reaction to the selling pressure that exists between $11,000 and $11,200.
This price region has catalyzed to multiple strong plunges in the past and could lead to a deeper drawdown if another rejection is posted at this level.
That being said, one fundamental indicator is flashing an incredibly bullish sign for Bitcoin. The cryptocurrency’s difficulty ribbons just entered the “buy zone” for the first time since March.
This indicates that the recent bout of consolidation may be nothing more than a precursor to an extension of its mid-term uptrend seen throughout Q2 and Q3 of 2020/
Bitcoin’s Price Consolidates Below $11,000 Following Sharp Overnight Upswing
At the time of writing, Bitcoin is trading up 1% at its current price of $10,900. This is around the price at which it has been trading at throughout the past few days and weeks.
The latest upswing came about shortly after BTC posted its weekly candle close. The strength of this close provided a boost to bulls, showing that it may be positioned to see further upside in the days and weeks ahead.
For Bitcoin to push any higher in the near-term, it must surmount the relatively heavy selling pressure seen between $11,000 and $11,200.
This is the region at which the benchmark crypto faced a grueling rejection at just over a week ago, which led it to decline to as low as $10,200.
On-Chain Data Shows BTC is Gearing Up for a Push Higher
According to the historically accurate Difficulty Ribbons indicator, Bitcoin could be on the cusp of seeing further upside.
Analytics platform Glassnode spoke about the indicator, explaining that it uses a “standard deviation to quantify periods of high ribbon compression” to signal good buying opportunities.
The last time it entered the buy zone – as it just did earlier today – was in March when Bitcoin set yearly lows of $3,800 that were followed by a series of massive upside movements.
“Bitcoin Difficulty Ribbon Compression is trending up and broke out of the green buy zone for the first time since March. Historically, these have been periods characterized by a positive momentum indicating significant BTC price increases.”
Image Courtesy of Glassnode.
How the market trends in the weeks ahead should provide investors with insights into the veracity of this buy signal.
Featured image from Unsplash. Charts from TradingView.
by Cole Petersen on September 29, 2020 at 07:30AM
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