Bitcoin Needs Weekly Close Above Tough $12K Hurdle to Restart Price Rally

Omkar Godbole
Aug 7, 2019 at 11:00 UTC
Updated Aug 7, 2019 at 11:09 UTC
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  • Bitcoin’s bull run from April lows near $4,100 seems to have stalled, with buyers repeatedly failing to keep gains above $12,000 in the last six weeks.
  • A high-volume weekly close (Sunday, UTC) above $12,000 is needed to revive the bull market.
  • A bullish weekly close may remain elusive if the cryptocurrency finds acceptance below $11,200 in the next day or two. That could pave way for a drop to $10,500.

Bitcoin needs to break above stiff resistance at $12,000 to unleash the next phase of the bull market, which began from lows near $4,100 on April 1.

The top cryptocurrency by market value is currently trading at $11,527 on Bitstamp, having fallen back from a one-month high of $12,325 yesterday.

This isn’t the first time BTC has failed to hold on to gains above $12,000. The cryptocurrency jumped to a high of $13,880 on June 26 only to fall back below $12,000 on the following day. Similar price action was seen in the following two weeks. Notably, prices rose to $13,200 on July 10, only to fall back below $10,000 the following day.

Currently, the bull market looks to have stalled, with $12,000 resistance acting as a ceiling to further gains, as seen below.

Weekly chart

Bitcoin broke into a bull market with a convincing move to $5,000 in April and rose to a high of $13,880 on June 26.

The cryptocurrency, however, did not find sustained acceptance above $12,000 in either the last week of June or the first two weeks of July.

The repeated failure to close above $12,000 indicates a weakening of bull momentum and has established the psychological level as the resistance to beat for the bulls.

So, a high-volume weekly close above $12,000 is needed to signal a continuation of the rally from April lows near $4,100 and open the doors to resistances at $15,000 and $17,235 (January 2018 high).

The odds of BTC closing this week (Sunday, UTC) above $12,000 would drop if prices slip below key support at $11,200 in the next day or two.

Daily chart

BTC fell 2.8 percent yesterday, snapping its seven-day winning streak.

More importantly, the cryptocurrency failed to close above the upper edge of the falling channel on the daily chart and created a candle with a long upper shadow – another sign of buyer exhaustion above $12,000.

That candle would gain credence and the outlook would turn bearish if prices close below $11,200 (Tuesday’s low).

3-day chart

A close above $12,060 today would confirm a bull flag breakout on the 3-day chart. A bull flag breakout is a continuation pattern that usually accelerates the preceding rally.

If confirmed, a breakout would potentially open the doors to fresh record highs above $20,000 (target as per the measured move method).

That said, a weekly close above $12,000 would be a stronger confirmation of the revival of the bull market.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.