Save for a few hours of price action deviation here and there, Bitcoin has effectively traded in a $1,500 range for nearly two months. That’s to say that bulls and bears are caught in an endless tug-of-war, with both sides failing to establish a trend.
But according to a crypto fund manager, a breakout is near. And he believes that if that breakout can take Bitcoin above ~$10,500, there’s “thin air” ahead of BTC.
Analysts accentuate the importance of $10,500 for Bitcoin
A founding partner of Bitazu Capital, Mohit Sorout, recently shared the chart below, accentuating the “importance of the price level BTC has hovered around for the past month.”
Sorout’s analysis was neutral, but the fund manager did note that with a lack of direction as per the average directional movement index (ADX) and volatility reaching multi-month lows, a big breakout is in the works.
Bitcoin breaking past $10,500 will mean that an even larger rally will occur as BTC will have entered a zone of little historical liquidity — or as Sorout fittingly put it, “thin air.”
Sorout is far from the first trader to have drawn attention to the importance of $10,500.
Rob Sluymer of New York-based market research firm Fundstrat Global Advisors recently identified that $10,000-10,500 is the zone at which the “conviction” of BTC bears will be “tested”:
“Next directional move on tap for BTC’s as bull-bear convictions are about to be tested. Bears can point to the downtrend at 10-10.5K. Bulls have the long-term uptrend (200-week sma) at their back.”
Indeed, over the past year, $10,500 has been a pivotal level for Bitcoin to cross past.
As can be seen in the chart below, $10,500 marked the top of Bitcoin rallies on three separate occasions: once in October of 2019, once in February of this year, and once at the start of June.
The fact that BTC has failed at this level so many times suggests that Bitcoin finally breaking past it will cement a bull trend.
It’s only a matter of time before that resistance is broken
There is a confluence of factors suggesting that it is only a matter of time before $10,500 is decisively flipped from resistance into support.
As reported by CryptoSlate previously, technical analyst Eric “Parabolic” Thies found that two key macro indicators show that “your time to buy Bitcoin below $10k is limited.” The indicators in question are the Chaikin Money Flow and the Stochastic RSI.
Thies reports that both of the indicators look structurally identical to how they looked prior to the 2016-2017 rally that took Bitcoin from the hundreds to $20,000 in the span of under two years.
On the fundamental side of things, Bloomberg’s Mike McGlone said that “something needs to go really wrong for BTC not to appreciate.” He cited the Bitcoin halving, decreasing volatility, a growing correlation with gold, BTC futures adoption, and the mass money printing as reasons to be bullish.
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