Bitcoin’s price topped $ 11,400 for the third time in three days, breaking through a critical resistance level. Earlier today, the price of BTC hit $ 11,444, but quickly returned to the $ 11,250 range.
Surprisingly, in the last hour, the price has once again crossed the $ 11,400 mark and some traders believe that further testing of resistance could increase the chances of a breakout.
Kelvin Koh of the Spartan Group said that when BTC exceeds $ 11,400, a rally to $ 12,000 is likely. Meanwhile, analyst and chain trader Willy Woo said the rally in Bitcoin above $ 11,000 could put BTC at the start of the “main bullish phase.”
Bitcoin’s 1 hour price chart. Source: TradingView.com
After hitting $ 10,470 on BitMEX, the price of Bitcoin dropped to around $ 11,260. Currently, the resistance range of $ 11,200 to $ 11,400 apparently prompts sellers to defend this level and prevent a major breakout.
Investors optimistic about the chance of a Bitcoin bull run
On June 27, Willy Woo, a chain analyst and Bitcoin trader, revealed a new pricing model for BTC. The model suggested that a new bull run for the main cryptocurrency was brewing. At the time, Woo said:
“It’s a new model I’m working on, it chooses the start of exponential races. 1) Bitcoin braced for a bull run until the COVID White Swan kills the party. 2) This pattern suggests that we are close to another bull run. Maybe another month.
Bitcoin’s weekly price chart with a new pricing model. Source: Willy Woo
A month has passed since the model was revealed, and the price of Bitcoin has risen from $ 9,100 to over $ 11,000. As an extension of the pattern, Woo said he was “relatively confident” that the main bullish phase would ignite.
The analyst broke down various on-chain data points, including Bitcoin’s mempool and the Relative Strength Index (RSI), to assess market cycles. Woo said the on-chain RSI, in particular, suggests that the main bull market could start in the fourth quarter.
Woo explained that:
“With the current breakout at 11K I’m relatively confident that the pattern of the last few months is working on the queue, we are at the start of the ‘bull main phase’… The 365 day chain RSI shows compression at beginning of the bullish cycle nearing completion, I expect an expansion of the RSI which characterizes the main bullish season of the fourth quarter of 2020 to 2021. “
Likewise, Koh has stated that if the price of Bitcoin continues to rise above $ 11,400, it will maintain its momentum. But if BTC continues to rally, the investor pointed out that alternative cryptocurrencies could consolidate. Koh said:
“If BTC breaks the resistance at $ 11.4K, we are going above $ 12K in no time. Will reduce the wind of altcoins again in the short term. ”
Before BTC hits $ 12,500, sentiment isn’t so bullish
According to David Lifchitz, chief investment officer of ExoAlpha, profit-taking from performing DeFi tokens has driven BTC and Ether (ETH) to soar. The initial upsurge then led to the liquidation of short contracts on futures exchanges.
As Bitcoin has started to rally, DeFi tokens and other alternative cryptocurrencies have started to decline, which strengthens the argument. Assets such as Compound, Chainlink and Cardano, which outperformed BTC in June, have stagnated over the past few days.
Lifchitz told Cointelegraph:
“The recent move in BTC-USD appears to have been linked to the profit taking of DeFi coins in the majors (Bitcoin and Ethereum), which triggered a short compression of over-leveraged shorts at BitMEX casino.”
In the near term, Lifchitz said a pullback could occur as the market cools, but if BTC breaks above $ 12,500 and stays above, then a bull market could materialize. Lifchitz said:
“So basically the rise of Bitcoin seems more driven by a spin and devaluation of the USD than a genuine interest in the coin, but if BTC reached and stayed above $ 12,500 (that is- (i.e. July 2019 high), it could change the narrative. In the short term, a slight pullback could be in the works, which would be healthy from here before embarking on another run to $ 12,500. ”
Overall, on-chain traders and analysts remain positive after Bitcoin’s relatively rapid rally above $ 11,000.
There is some downside risk as the futures market is overheated with high funding rates, but sentiment appears to be improving and BTC is repeatedly testing a key resistance level at $ 11,400 as a result.