Bitcoin price is once again testing the ‘now-invincible’ resistance at $12,000 but this time around the pair is not alone. Institutional buying has come to support BTC/USD pair as more upside action is expected soon. So far retail and Robinhood investors were driving the Bitcoin price phenomenon but now big boys have come to join the party.
JP Morgan Chase has entered the crypto sphere with investment in ConsenSys. The news has ignited institutional interest in BTC and other cryptocurrencies. Dull price action dominated the past few days as the price oscillates between $11,000 and $11,500. Now, Bloomberg reports that Bitcoin has significant upside potential and is ready to breach key technical levels including the $12,000 resistance.
Bitcoin price buoyed by traditional institutional investors
The weekend saw muted price action that took BTC/USD pair beyond the lower Trading Envelope mark. On Tuesday, the crypto king almost reached the $12,000 mark only to correct again. The pair is still trading within the upper and lower Bollinger bands with an upward bias.
As per Bloomberg, the ‘GTI Global Strength Indicator’ is pointing towards a spurt in buying interest and there’s still room before it touches overbought territory. Bloomberg states that Bitcoin price is still below its potential 2020 highs. The latest interest from institutional investors is sure to bring forth a period of new highs as big players warm up to BTC/USD pair.
Fidelity Investments Bitcoin Fund launched last week also points is the same direction. Traditional investors are increasing BTC share in their portfolios. The entry of JP Morgan Chase and Fidelity Investments will surely create more influx of conventional investors into the BTC realm and eventually drive Bitcoin price higher.
What technical indicators say about BTC/USD price
It is now getting excruciatingly frustrating that the Bitcoin price is unable to cross $12,000 confidently. For weeks now, the price is not able to close confidently above this crucial resistance and move further towards the $14,800 level. BTC whales are waiting to enter the market and pour more funds once the price crosses the long-term resistance.
On the other hand, the longer BTC/USD price remains below $12,000, the more bears will get the upper hand. The lower support at $11,100 is a pretty strong base to rely upon in the short term. In case, Bitcoin price breaks below this crucial level, there can be a quick slide towards the $10,000 support level.
Currently, consolidation has taken precedence as Bitcoin price moves sideways towards $11,800 which is 50 percent Fibonacci mark. RSI is muted and indicating sideways movement in the short term. MACD at 116 is signalling a similar intent.
Net long positions are on the rise
Retail investor data indicates that close to 91 percent of retail traders are holding a net-long position. BTC/USD price touched $11,600 on August 6 and most traders are sitting on long positions since. The number of traders holding long positions has increased by 2.3 percent compared to the past week. Net-short positions have decreased by 16.7 percent compared to the previous week.
If a contrarian technical viewpoint is taken into account, a potential fall in Bitcoin price is very much likely. The abrupt rise in long positions can trigger a contrarian trade in play provided there’s large-scale selling – a phenomenon unlikely to happen beyond $10,500 support.
Short term bearish move will only cement long term bull move
As trader Alan Masters points out, the price is moving below the 10-day exponential moving average along with an increase in volume. The MACD is giving out multiple signals on various hourly charts about a possible breakout below in the short term. A bearish divergence in a 2-hour chart can sill over onto the larger timeframes.
Yesterday’s candlestick print shows a bearish tick. Net-long positions along with technical indicators may point towards a short correction. DMI is another indicator to watch out as the short-term path above looks treacherous. Yesterday’s breakout above the ADX line only served as a reminder to the bulls that bears are waiting for them at the $12,000 level. The imminent sell-off canceled the short-term bullish momentum for the time being.
Luckily, the $11,100 is proving to be a healthy buying platform. Both retail investors and institutional investors would load up more positions here. It will only serve as a buying point for institutional investors and BTC whales.
Experts agree – Bulls are in control
Trader ‘Byzantine General’ says that bulls are firmly in control as BTC/USD posted an overextended rally before a minor pullback. As long as $10,500 mark holds well, Bitcoin price is in bull territory. He says that the bull market top is still far away as short-term correction does not mark the end of a prolonged bull rally.
Glassnode says that short-term correction towards $11,200 only helped end the overleveraged long positions prevalent in the futures market. the rapid price drop indicates that long-contracts are toned down and the price has stabilized after a minor correction.
The relentless pursuit to break above the $12,000 resistance mark is well within reach. Bulls need to post higher highs this week and institutional investors will do the rest. For now, bulls are in the driving seat.
Disclaimer: The information provided is not trading advice but an informative analysis of the price movement. Cryptopolitan.com holds no liability towards any investments based on the information provided on this page.