Why $11.5K Is the â€˜Most Importantâ€™ Level for Bitcoin, Traders Explain
The price of Bitcoin is set for a weekly candle closure above $11,500 for the first time since August 2019.
The price of Bitcoin (BTC) is hovering at $11,300 and is nearing a pivotal technical level, which some traders are arguing makes $11,500 â€œthe most importantâ€� level to confirm a new bull cycle for BTC.Â
If Bitcoin stays above $11,500 then by Aug. 10 it would be the highest weekly close for BTC price since mid-2019. The weekly candle in August 2019 closed slightly above $11,500. In other words, a close above this level would print the best weekly candle since the 2017 bull run.Â
A closure above $11,500 would break Bitcoin market structure
Meanwhile, traders are closely observing the upcoming weekly candle closure because many believe it could decide whether the bull market continues. Until BTC cleanly breaks out of $11,500, technically, there is strong overhead resistance. One pseudonymous trader said:
â€œ11.5k is the most important level on Bitcoin,â€�
Weekly price chart of Bitcoin with key resistance and support levels. Source: Immortal Technique
When the price of Bitcoin hit $12,000 on Aug. 2, some investors argued that BTC already broke its market structure. If so, BTC theoretically has room to surge to higher resistance levels at $14,000 and $17,000.
Sven Henrich, a trader at NorthmanTrader, believes Bitcoin could head towards $17,000. For the technical case for a prolonged rally to be intact, Henrich said BTC has to remain above $10,500.
As long as the price of Bitcoin stabilizes above $10,500, even if BTC retraces, Henrich said a rally to $17,000 is possible. He said:
â€œFirstly note that a breakout is bullish if it can be successfully defended, meaning as long as $BTC can remain above the breakout trend line it has significant technical room higherâ€¦ But note that inside the larger wedge consolidation a potentially much more bullish pattern has emerged, that of a potential inverse which would point to near 17,000.â€�
A technical case for an extended Bitcoin bull trend. Source: NorthmanTrader
Variables for both bull and bear cases
In the near-term, analysts point toward various macro factors that could boost the sentiment around Bitcoin. Most notably, the value of the United States Dollar is depreciating.
Overall, trading volumes across various markets, including retail and institutional, are increasing. For example, the open interest of the CME Bitcoin futures market has just hit a record high. Despite mass liquidations on Aug. 2, BTC has remained relatively stable above the key technical support level at $10,500.
While more factors seemingly buoy the bull case for Bitcoin, there are two risks BTC faces in the short term. First, until $12,000 clearly breaks, the risk of overhead resistance remains. Second, several technical metrics, including funding rates and greed index (currently at 75% or â€œgreedâ€�), hint at an overheated rally.
However, it is uncertain whether positive on-chain metrics, such as the number of â€œHODLersâ€� reaching an all-time high, can offset potential risks. For now, until BTCâ€™s weekly candle closes above $11,500, the market remains cautiously optimistic as attention shifts to the U.S. dollar and stocks.
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