Bitcoin price recovered back above $11.500, leading traders to suggest renewed attack on $12.000 could occur soon
Today’s Bitcoin price bounced back from its recent low of $ 11,125 on August 11 to $ 11,617. This shows that the traders are turning optimistic as important data shows a significant amount of liquidity for BTC up to $ 12,000.
As Bitcoin price rose, many major altcoins rose in parallel
Chainlink (LINK), which has seen substantial gains all week, recorded a 19.6% gain. DeFi-related tokens like WLife, including Compound (COMP), Maker (MKR), Aave (LEND), and Cosmos (ATOM), saw gains ranging between 20% -50%.
Historically, Bitcoin’s price has pointed to the most liquid areas, and whales have tended to target zones with a cluster of buy or sell orders to find enough liquidity.
For example, if Bitcoin is overly shorted, it is vulnerable to a short squeeze because whales are likely to target the liquidation prices of shorts. When shorts are liquidated, short holders are forced to market buy, causing buying demand.
Crypto analyst Byzantine General quoted data from Hyblockcapital and said:
“There is high liquidity in the $11,500 to $12,000 range. Many traders seemingly shorted Bitcoin on the way down, causing short liquidation prices to be present at around $12,000. Green day today. Who could have possibly thought? Well except for me of course. Still a lot of liquidity above us. I say we keep going.”
Bitcoin liquidation levels on the low time frame chart of Bitcoin | Source: Hyblockcapital
Crypto trader Redxbt said:
“The Bitcoin recovery might still have legs.”
It appears he is referring to Bitcoin’s break out of the $ 11,550 resistance level as an indication that the uptrend will continue.
These optimistic near-term projections from traders coincide with a historically accurate indicator that signals that bull run are imminent. The Bitcoin Hash Ribbon indicator lit up for the first time since it signaled a rally when BTC was hovering at $ 9,500.
Market data provider Glassnode said:
“The Bitcoin Hash Ribbon indicator can be used to identify market bottoms due to miner capitulation. It lasted one bought signal when BTC was around $ 9,500, which is up over 20% since then.”
Excitement to enter the crypto market
In recent weeks, the crypto market has seen a significant increase in small and medium market capitalization assets. Driven by the DeFi craze, altcoins have outperformed Bitcoin since the start of August.
John Todaro, TradeBlock’s lead researcher, said:
This $crypto market reminds me of early-mid 2017 when most mainstream media outlets ignored the space at large, while mid cap alts were doing 10-15x.
— John Todaro (@JohnTodaro1) August 12, 2020
In the medium to long term, strong performances from altcoins could catalyze a strong Bitcoin rally. Previous price cycles have shown that a substantial rally of the altcoin market is often followed by a profit-taking rally in which proceeds flow into Bitcoin and Ether.
Read more:
- A Fractal Appearing On Bitcoin Price Charts Suggests Crash Is On The Way, Followed By Much Worse: More Painful Sideways
- Microstrategy Purchased $250 Million In Bitcoin, Adopting The Cryptocurrency As Its Primary Treasury Reserve