Bitcoin witnessed some of the most intense volatility it saw in months yesterday.
After rallying up to highs above $12,000, BTC struggled to overcome resistance at this level, eventually led to a sharp drop in price that made it reel into the low $ 11,000 area.
It has found some strong support at this level for the past several hours but is still in a precarious position due to the intensity of this sell-off.
A technical impact on BTC is that this decline has pushed it below the critical long-term level that analysts are expecting BTC to close the week above.
In order for its strong medium-term uptrend to continue further, buyers need to regain $ 11,500.
Bitcoin broke below critical level after selling off
At the time of writing, Bitcoin is trading more than 5% down at its current price of $ 11,133. This marks a slight rebound from the recent low of $ 11,000 that has been mined many times after last night’s decline.
This decline occurred quite suddenly and dealt a strong blow to the public strength that BTC has established over the past few weeks.
Whether or not a buyer can set up a strong support base at $ 11,000 will likely be the deciding factor for the next destination.
Analyst “Josh Rager” noted in a recent tweet that $ 11,530 is now the critical level that traders need to watch closely.
This level has been established throughout the past year as a macro resistance, and the latest decline has forced BTC back below it.
“BTC – a bummer that Bitcoin price back under that long term level for the weekly close tomorrow. Need to move back up and close over $11,531, but after a drop like this, I’m not sure that we do immediately. Doesn’t mean price can’t pump, but volatility should be expected.”
$BTC – a bummer that Bitcoin price back under that long term level for the weekly close tomorrow
Need to move back up and close over $11,531 but after a drop like this, I’m not sure that we do immediately
Doesn’t mean price can’t pump but volatility should be expected pic.twitter.com/GOoOoLBTDk
— Josh Rager ? (@Josh_Rager) August 2, 2020
BTC is at the “do-or-die” level
Analyst “Teddy” echoed the importance of this level, explaining that a weekly close above $ 11,500 would allow the price to continue to rise.
Conversely, a break below this level can lead to a period of consolidation, bode well for altcoins.
“This weekly candle close will be vital to understand the upcoming short term trend. A weekly close above = continuation. Weekly close below = consolidation/rejection (great for altcoins).”
This weekly candle close will be vital to understand the upcoming short term trend.
Weekly close above = continuation
Weekly close below = consolidation/rejection (great for altcoins)$BTC pic.twitter.com/DzAoUSNStw
— Teddy (@TeddyCleps) August 2, 2020
Silver and gold will guide Bitcoin higher
While talking about Bitcoin’s rejection of $ 12,000, Alex Krüger – an economist focused on the famous cryptocurrency – explained that this price action led to BTC forming a “blowoff top.”
Despite being a bearish sign, he noted that both gold and silver had similar technical formation just last week, with a quick decline followed by an expansion of their uptrend.
“That was a blowoff top in ETH and BTC last night. A blowoff doesn’t have to be the top. Silver and gold had a blowoff top last week. See how similar charts are in the days and minutes preceding the crash. The bigger picture remains unchanged. Higher highs ahead in 2020 IMO.”
Source: Alex Krüger / Twitter
Because the economic context currently affecting Bitcoin has dragged gold to an all-time high, it’s likely that the BTC uptrend is far from over.
You can see the Bitcoin price here.
Read more:
- Bitcoin crashed $1,500 in 10 minutes after breaking $12,000
- Bitcoin could reach $17,000 in the next few weeks base on this fractal