Bitcoin Needs Weekly Close Above Tough $12K Hurdle to Restart Price Rally
Bitcoin needs to break above stiff resistance at $12,000 to unleash the next phase of the bull market.
- 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.
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.
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).
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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