Bitcoin has been flashing signs of overt weakness throughout the past few hours, dropping as low as $10,400 before facing an influx of buying pressure that allowed its price to surge back up to highs of $10,800.
The cryptocurrency now appears to be caught within a short-term consolidation phase as bears and bulls fight for control over its near-term trend.
This may cause it to see some range-bound trading in the near-term, but analysts are noting that its outlook still remains positive as long as it continues defending one crucial support level.
That being said, how BTC closes its daily candle should offer significant insights into its near-term outlook, as a failure for it to close above $11,000 could be highly damaging for its market structure.
One analyst believes that this type of close will lead it to plunge down towards the lower-$10,000 region, which is where it may trade for an extended period of time.
Bitcoin Struggles to Find Strong Support as Selling Pressure Ramps Up
After losing its position within the $11,000 region, Bitcoin has been expressing signs of immense weakness as its price trades within the mid-$10,000 region.
At the time of writing, Bitcoin is trading down over 7% at its current price of $10,600, which marks a massive decline from its weekly highs of $12,200 that were set just a few days ago.
Analysts are offering mixed outlooks on the benchmark cryptocurrency, but there is a general consensus that its next massive support sits around $9,600.
That being said, one trader noted that the support at $10,500 should be enough to provide some near-term relief.
“BTC update: There we go, now it can bounce. Wouldn’t get too bullish on that bounce, but ~$10900 seems sane,” he explained.
Image Courtesy of Don Alt. Chart via TradingView.
BTC Approaches Critical Daily Close as Analysts Watch for Reaction to $11,000
As Bitcoin’s daily close approaches, how it responds to $11,000 will be crucial for determining its near-term outlook.
One analyst spoke about the importance of this level in a recent tweet:
“BTC HTF Update: Huge resistance region around $11,400 seems to be rejecting on HTF charts, honestly the next logical support if we close current daily below $11,000 is likely $10,400. Happy to have close some positions at the local top, currently sitting in the sidelines atm.”
Image Courtesy of Cactus. Chart via TradingView.
If Bitcoin is rejected at $11,000, it is reasonable to expect it to see significantly further near-term downside.
Featured image from Unsplash. Charts from TradingView.