Bitcoin price is trading at a crucial juncture – a point where either bulls or bears will eventually drive the price action forward. BTC/USD price is oscillating between $10,200 and $10,350, while clinging firmly to the strong $10,000 support level.
Currently, BTC must display bullish tendency to cross the immediate $10,520 resistance. Subsequently, the $11,200 resistance should be the next target. There is strong support underneath at $9,500. All these price points are crucial in the next 48 hours as Bitcoin traders look for signs to demolish the current price range.
Technical indicators point end of consolidation
Multiple attempts by the bears to take Bitcoin price under the $10,000 level haven’t fructified. Most recent lows have only turned out to be lucrative buying opportunities for the bulls. Bears are finding it increasingly difficult to confidently dent the Bitcoin price under the $10,000 psychological barrier. If the current trend prolongs, bulls will enter the scene leading to massive buying activity which will cause a price surge.
There are considerable Bitcoin addresses currently located between the $10,000-$9,600 price range. All these addresses are ready to guard the $10,000 support and prevent further fall in BTC/USD price. On the upside, if the pair crosses $10,600 in price, the recovery can quickly move past $11,200.
Bitcoin hashrate holds the key to journey past $12,000 resistance
On-chain metrics data indicates the Bitcoin hashrate recovering from China floods and rising steadily. The rain-ravaged Sichuan province that holds many industrial-scale crypto mining farms is slowly inching towards normalcy. Rising hashrate may very well end the consolidation phase in bitcoin price.
Despite the price decline, Bitcoin hashrate has slowly inched towards 128 TH/s. BTC hashrate touched 119.39 lows in August due to shutdowns in many crypto farms across China. Hashpower represents the overall network health and it is a macro factor in price studies. Affordable electricity and consistent mining activity ensure the hashrate remains stable.
Bitcoin price building the premise to touch $12,200
The BTC/USD price is displaying healthy signs of heading towards the crucial $12,000 resistance. Several technical indicators are pointing towards this direction. Having traded in a compressed range for the past few days, the 4-hour chart is moving upwards towards the highs of the symmetrical triangle.
Bitcoin price should sustain its present movement beyond the 50-day simple moving average. The ‘relative Strength Index’ is currently in neutral region. The MACD is consolidating albeit with an upward bias. The 50-day SMA must be surpassed to act as support taking the BTC/USD price higher towards $11,000.
As per Timothy Peterson of Cane Island Alternative Advisors, whenever the 30-day returns in BTC have touched lows, the pair posts a gain of 20 to 40 percent in the next few days.
CME gap and Bitcoin dominance metric enter the scene
The rise in long-tail candlestick pattern on the hourly BTC/USD chart looks promising. It signifies BTC bull activity at lower price levels. Sustained buying is missing since the price can’t break beyond $10,625 indicating that sellers await at this threshold.
Analysts look cautiously at the CME gap between $9,900 and $9,650. It is crucial that the gap gets filled in order for the Bitcoin price to break the current range. The volume profile visible range (VPVR) is reflecting a strong bullish action near the $9,962 price level. The CME gap at $10,500 is another significant level to watch as order fulfillment and high volumes at this price point can quickly heat the BTC/USD price.
Bitcoin dominance metric is also coming into play these days, especially in light of the rising DeFi. In 2017, BTC posted a 1,318 percent rise. However, there were many outperformers in 2017 that went beyond BTC. For example, XRP rose 36,018 percent and XLM increased by a factor of 14,441 percent. The myth that Bitcoin doesn’t rise in sync with altcoins doesn’t, however, hold in 2020.
As the Bitcoin dominance rate drops, those hoping for a sustained altcoin rally may be in for a surprise this year. In 2018, when new ICOs were raking in big money, the Bitcoin dominance rate declined from 95 percent to 37 percent. The Bitcoin price rose despite the abrupt increase in the altcoin market cap. Fast forward to 2020 and there’s an exact opposite trend in existence. Bitcoin prices and Bitcoin dominance are both rising in tandem.
Increasing volatility to help push BTC/USD pair past $11,000
Kraken, a crypto exchange, has released a report saying that annualized volatility in Bitcoin has touched a new low of 15 percent in July. Since then, the volatility has picked up the pace and grew stronger than the pre-pandemic phase. On average, BTC volatility surged by 140 percent.
Kraken’s report mentions that Bitcoin could lose its market share to other altcoins and DeFi. However, once traders are done extracting profits from altcoins, the capital flow will eventually benefit Bitcoin and contribute to its rise.
For now, Bitcoin price rests comfortably in the $10,000 and $10,350 range. Any surge beyond the $10,500 level will only help fill the CME gap and push the BTC/USD pair higher towards $11,000.