Bitcoin’s consolidation phase seen throughout the past several weeks muddied the confidence that many investors previously had regarding the strength of its uptrend.
Although the crypto’s 150% surge from its March lows has been incredibly impressive, this momentum halted as soon as it reached the five-figure price region.
It has now posted two rejections at $10,500 following its rebound from $3,800 and has posted countless other rejections at $10,000 in the time since.
This has done little to bolster its market structure and has caused many investors to be concerned that it is in the process of forming yet another lower-high.
That being said, analysts are now noting that it is essentially clear skies ahead for Bitcoin once it is able to break above $10,400.
Fundamental data regarding the strength of BTC’s investor base also suggests that it may still have to ability to negate its recent bearishness and push higher in the days and weeks ahead.
Bitcoin Hovers Beneath Key Resistance, But It’s “Thin Air” Above
At the time of writing, Bitcoin is trading down marginally at its current price of $9,380. The crypto is currently inching lower after consolidating around $9,400 for the past couple of days.
The present technical weakness expressed by BTC appears to be rooted in the recent rejection it posted at $10,050. After tapping these highs, it lost its momentum and found itself caught within a downtrend that led it to $9,000.
Despite having some strong support between $8,600 and $9,000, each rejection the crypto posts around the five-figure price region seems to cause it to enter consolidation channels that are closer to its range-low support.
This does seem to be a grim sign for its near-term outlook, and it remains unclear as to what could cause it to see any major upside.
One factor that still provides hope for bulls is the fact that it is essentially “thin air” above $10,400 – meaning that there isn’t any heavy resistance above this level until significantly higher.
Mohit Sorout – a founding partner at Bitazu Capital and a respected analyst – spoke about this in a recent tweet, explaining that $10,400 is a level of critical importance.
“Hard to overstate the importance of price level BTC has hovered around for the past month. There’s only so much corn sellers can dump. Thin air above,” he explained.
Image Courtesy of Mohit Sorout. Chart via TradingView
BTC Flashes Signs of Fundamental Strength
Bitcoin’s fundamental strength may also be one factor that helps it climb significantly higher in the near-term.
Alistair Milne – the CIO at the Altana Digital Currency Fund – spoke about the amount of Bitcoin being held by investors over an extended period of time in a recent post, explaining that it is on par with that seen in 2015-2016.
“What if I told you that the amount of Bitcoin held without moving for >12 months is on course to make new ATHs (>61%) and barely changed in the March COVID panic… These levels of HODL’ing were last seen when the price was $200-500 back in 2015/16.”
Image Courtesy of Alistair Milne.
If history repeats itself, this could signal major upside is imminent in the near future.
Featured image from Shutterstock. Charts from TradingView.
