Despite bitcoin’s rally to three-week highs, some analysts remain cautious and want to see the cryptocurrency topple key resistance at $11,200 before calling a bullish revival.
- The biggest cryptocurrency by market value has risen by 3.5% to levels above $11,000 in the past 24 hours, confirming an upside break of a narrowing price range represented by trendlines connecting Sept. 19 and Oct. 1 highs and Sept. 8 and Sept. 23 lows.
- Bitcoin is currently trading near $11,050 – up 6% from lows below $10,400 seen earlier this month and the highest level since Sept. 20, according to CoinDesk's Bitcoin Price Index.
- While the recovery and the range breakout looks impressive, chart analysts and traders say $11,200 is now the level to beat for the bulls.
- "We consider the breakout of the Sept. 19 high of $11,200 to be a more significant catalyst for further upside," Lennard Neo, head of research at Stack Funds, told CoinDesk. He added the price range of $10,000 to $11,200 may hold until more clarity surfaces going into November U.S. elections.
- Bitcoin's rejection near $11,200 on Sept. 19 was followed by a four-day sell-off to $10,200. In other words, the cryptocurrency established a lower high (marked by a circle in the chart above) at $11,200 – a bearish pattern.
- As such, a break above $11,200 would be more credible evidence of a bullish breakout, as pointed out by Neo.
- Meanwhile, Simon Peters, a crypto market analyst at investment platform eToro, said bitcoin needs to hold or establish a new base above $11,000, in which case it could make a move toward the next psychological hurdle at $12,000.
- That's because bitcoin failed multiple times in mid-September to absorb selling pressure above $11.000.
- And while Neo and Peters remain cautious, Phillip Gillespie, CEO of the over-the-counter liquidity provider B2C2 Japan is foreseeing a pick up in volatility in the near term, as U.S. elections, a large systematic risk even, are scheduled for Nov. 4.
- "If we weren't weeks away from the U.S. election, I would think we have a bullish setup in bitcoin," Gillespie said while sharing his view on Thursday's triangle breakout.
- Disclosure: The author holds small positions in bitcoin and litecoin.