Bitcoin’s technical outlook has greatly improved throughout the past few days, with bulls’ ability to push the cryptocurrency off of its $10,600 lows and past its $11,200 resistance providing its market structure with a serious boost.
Where it trends next will likely depend on its reaction to its next key resistance level at $11,600. The resistance here is quite significant and could cause it to see notable losses if bulls cannot surmount it.
It is important to keep in mind that the cryptocurrency’s current momentum is rooted in bullish news developments surrounding Square’s decision to buy $50 million worth of BTC to hold as a reserve asset.
Many investors believe that more companies will follow suit, creating a sell-side liquidity crisis that potentially drives Bitcoin significantly higher.
There is one newly formed CME gap that BTC may have to fill before it can see any further momentum.
One trader is pointing to this level as a short-term pullback target, noting that a rebound here could catalyze a serious upswing that drives Bitcoin past the resistance it is currently struggling to surmount.
Bitcoin Enters Fresh Consolidation Phase Following Recent Upswing
At the time of writing, Bitcoin is trading up just over 1% at its current price of $11,430. This marks a notable upswing from weekly lows of $10,600 that were hit just before news broke surrounding Square’s BTC purchase.
This upswing has begun losing its momentum as the cryptocurrency nears its resistance at $11,600.
Tonight’s weekly close, however, may catalyze some momentum due to the significance it has for the cryptocurrency’s market structure.
If BTC fails to break above this level in the near-term, it could strike a serious blow to the strength it has built throughout the past few days.
Analyst: This New CME Gap May Draw BTC’s Price Lower
While speaking about where he thinks Bitcoin may trend in the near-term, one analyst noted that he is setting his sights on a decline towards a recently formed CME gap at $11,110.
He notes that a decline here will provide a high probability that further upside is imminent due to the robust support sitting just below.
“Have placed some bids around the CME gap at 11,110. Hoping they fill for the weekly close or early Monday. High probability that we do so could be an easy trade (I hope),” he said.
Image Courtesy of Pentoshi. Chart via TradingView.
If Bitcoin maintains its current strength prior to its weekly candle close, this could be enough to provide it with some strength that boosts its near-term outlook.
Featured image from Unsplash. Charts from TradingView.