Why Bitcoin Needs to Flip $9,700 Into Support to Support Bull Case
While Bitcoin (BTC) is around 17% lower than its local top of $10,500 established late in October, many analysts have concluded that the bull case for the cryptocurrency market is brewing once again. In fact, an analyst recently floated a prediction that the BTC price could reach as high as $11,500 in a few weeks’ time, citing a bullish chart pattern that Bitcoin was exhibiting.
It may be too soon for such optimism, though. Teddy, a popular crypto analyst on Twitter, recently noted that Bitcoin needs to clear and reclaim two key resistance levels before he can “get stupid bullish” on the prospects of digital assets.
Bitcoin Bulls Needs to Reclaim $9,700
According to a chart posted by Teddy, while the 42% President Xi Jinping-induced surge was undoubtedly bullish, Bitcoin remains between two key levels: a horizontal resistance at $9,700, which BTC has interacted with for the past few months, and a diagonal resistance that originates from the year-to-date BTC price peak of $14,000.
Looking at the greater picture
Price still didn’t break
– Horizontal KEY support now resistance
– Diagonal resistance
Already long, but I’ll get stupid bullish upon breaking those two lines
Stupid bulls like me will say this dump was just a retest pic.twitter.com/BtIazn79y4
— TEDDY ⛓️📉 (@teddycleps) November 10, 2019
Reclamation of these levels would mean that Bitcoin is cleared for takeoff, so to speak. But will it happen? According to some technical indicators, for sure.
Byzantine General pointed out on Sunday morning that Bitcoin’s reclamation of the Bollinger Band basis line around $8,700 is “bullish,” as it seemingly confirms that the cryptocurrency is ready to leg higher. In fact, he noted that the last time BTC bulls managed to retake control of basis line was prior to the surge from the high-$3,000s to $14,000.
History repeating would see Bitcoin leg higher in the coming weeks and months, potentially to close near the all-time high in time for the halving.
Not All Sunshine and Rainbows
Sure, the technicals are starting to lean in favor of bulls, but BTC was recently rejected from one key level: as pointed out by cryptocurrency trader Crypto Vulture, Bitcoin’s surge on Sunday was rejected by the 200-day moving average at around $9,200.
The 200-day moving average, for some context, is an oft-cited level that analysts say is indicative of whether or not the asset/chart being analyzed is in a macro bull trend or a macro bear trend. With this in mind, the rejection implies that a long-term bear trend might ensue.
Bitcoin got rejected by the 200DMA (which is around 9200).
It’s safer to wait for a daily close above the 200DMA if you’re looking for longs otherwise this could turn out to just be a bearish retest of the 200DMA before a further drop. pic.twitter.com/AVcXMDByIu
— CRYPTO VULTURE (@year_alt) November 10, 2019
Also, a fractal has suggested an impending move to the low-$7,000s. As reported by NewsBTC previously, Tyler Durden on Twitter posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.
If the fractal plays out in its entirety, BTC could potentially fall as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.
— Tyler (@TylerDurden) November 9, 2019