The Bitcoin price, as it is by nature, fluctuating above $10,000. At $11,776 at the time of writing, the $10,000 is an important level for traders.
Not only is it a psychological round number but after today—and the past week of consolidation, the Bitcoin price is now stuck above $10,000 for the third-longest period in its short history.
Often, sharp rallies above $12,000 are later accompanied by punishing reversals, wreaking havoc to over-leveraged derivatives traders.
Will BTC at $12,000 be a ceiling?
Thus far, the stability above this round number and the failure of bears to press lower less than a week after Bitcoin encouragingly soared to $12,473—printing new 2020 highs, points to a possible accumulation.
Still, while being cautiously optimistic, there is a slight chance of Bitcoin soaring to $14,000 or June 2019 highs if bulls push back above $12,000 this week.
A possibility, nothing can be taken for granted considering the slew of supportive fundamental events in the past few days.
Institutional exposure to Bitcoin
For instance, from the investment circles, more Americans are pouring to crypto through regulated channels.
Grayscale which recently pushed a Bitcoin and crypto advert saw its assets under management spike to a new high above $6.1 billion revealing renewed interest comes at a time when a two-year HODLer liquidated his Bitcoin stash when it hit $12,000.
Institutions and high network investors continue to pour capital to the high-performance asset of which cryptocurrencies like Bitcoin found themselves right at the top.
But over and above everything else is the hopes Bitcoin presents to investors wary of inflation after a deluge of free money when Coronavirus was at full throttle.
Central banks, embarking on money printing mission to rescue badly hit businesses and corporations slashed interest rates to record lows before topping it with quantitative easing. Combined, this will push inflation which will weaken purchasing power.
Bitcoin and gold are two noticeable assets that continue to pump in the face of hyperinflation fears.
Bitcoin price analysis
After a minor, inevitable correction, the Bitcoin price is bouncing back amid optimism of a break above $12,000. In the last week, the Bitcoin price is relatively stable versus the USD and is outperforming ETH.
In the daily chart, the trend is bullish and firm. The immediate support level is the 20-day moving average, the middle BB. As long as prices trend above this mark with decent trading volumes, the uptrend remains intact validating a ramp-up in lower time frames.
Still, there are fears of a retracement below $11,000 especially if the current pullback continues with low trading volumes. Besides, from the chart, prices are consolidating inside Aug 21 bear candlestick fanning bears from an Effort-versus-Result perspective.
A slip below Aug 22 lows of $11,400 could spark a sell-off which may push BTC prices back below the immediate support trend line confirming the double bar bear reversal pattern of Aug 17 and 18.
In this case, bears may aim $10,500 in a retest.
Chart courtesy of Trading View
Disclaimer: Views and opinions expressed are those of the author. This is not investment advice. Do your research.