These 5 Technical Trends Show Bitcoin Could Drop After Passing $11k

Bitcoin has pushed above $11,000 after consolidating under that pivotal resistance for a number of days. The leading cryptocurrency now trades for $11,070, pushing slightly higher after legacy markets closed on Friday evening.

While Bitcoin retaking $11,000 is a bullish sign, a historically accurate trader thinks that a bearish reversal here is likely.

The trader in question predicted towards the end of August that Bitcoin would drop to $9,700. He was proven right just days later when BTC was rejected at $12,000, then subsequently sunk to a low of $9,800 in the week that followed.

Should his call be accurate once again, there’s a high likelihood Bitcoin’s recovery from the $9,800 lows to these $11,100 highs will soon end.

Related Reading: Here’s Why This Crypto CEO Thinks BTC Soon Hits $15,000

Why Bitcoin Could Soon Drop From the $11,000 Highs

Bitcoin is primed to undergo a rejection at the $11,000 highs because there is a confluence of technical resistances in that range.

The aforementioned trader who called the ongoing correction noted these resistances in a recent tweet. They are as follows: 

• $11,100 is the 61.8% Fibonnaci Retracement of the recent highs near $12,000 and the lows, making it a likely reversal level.
• There is the four-hour 200 simple moving average and 360 simple moving average at around $11,000.
• BTC printed a strong wick above the $11,000 resistance but has yet to hold above that level, potentially marking a support-resistance flip to favor bears.
• This is a weekend pump, meaning a CME futures gap has been created. Most CME futures gaps revert in the span of a week for Bitcoin.
• There is decreasing volume on this move higher, suggesting Bitcoin’s upward momentum is rapidly losing steam.
• Bearish divergences have formed between BTC’s price action and the four-hour RSI.

These six factors working on tandem will mean that Bitcoin soon corrects from these highs, then drops back to the downside.

Related Reading: It’s “Logical” for Ethereum To Reject At Current Prices: Here’s Why

All Eyes on Legacy Markets

Bitcoin could benefit from a rally in the legacy markets, though.

That’s to say, if the stock market opens green on Monday, Bitcoin could continue its ascent.

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Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
These 5 Technical Trends Show Bitcoin Could Drop After Passing $11k