Bitcoin has been stuck below $12,000 for the past couple of weeks, with the intense selling pressure here slowing the momentum that it built since late-July.
Each attempt to break above this price region has resulted in the crypto facing a strong rejection that leads its price down towards its support at $11,200.
This level has held strong over the past week, with buyers ardently defending against a dip below it.
That being said, one analyst is now noting that the key liquidity region he is closely watching sits within the lower-$10,000 region.
He postulates that this may be where BTC has to decline towards before it is able to garner any strong upwards momentum. If this is the case, then the benchmark cryptocurrency may soon post some notable losses.
This will likely strike a heavy blow to investor sentiment.
Bitcoin Consolidates in Mid-$11,000 Region as Bulls and Bears Reach an Impasse
At the time of writing, Bitcoin is trading down just under 1% at its current price of $11,485. This is around where it has been trading throughout the past few days.
Last Saturday, the cryptocurrency faced a rejection when it tried to break $12,000. This subsequently led its price to slide down towards $11,200.
Buyers have been ardently defending this level in the time since, with each break below it being quickly bought.
This has provided BTC with some slight momentum. Its price is now stabilizing within the mid-$11,000 region as both its buyers and sellers struggle to gain control of its short-term and mid-term trend.
These two aforementioned levels also represent the upper and lower boundaries of a trading range that it is currently caught within.
Until it breaks above $12,000 or below $11,200, it is impossible to forecast where it will trend next.
This Liquidity Pool May Drag BTC’s Price Towards $10,000
Assets like Bitcoin seek liquidity. As such, one of the major liquidity pools that the cryptocurrency may need to visit before pushing higher sits at $10,000.
One popular analyst spoke about this in a recent tweet, saying:
“I find it difficult to believe we push to new local highs without tapping this liquidity.”
Image Courtesy of Chase_NL. Chart via TradingView.
The same analyst further went on to note that Ethereum could be the factor that invalidates this possibility, as an ETH breakout could pull BTC higher.
“The counter would be ETH pulling it up if it breaks out, but ETH’s pump narrative was DeFi demand, no? With ETH becoming much more costly to use, will it still be in heavy demand?”
Featured image from Unsplash.
Charts from TradingView.
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Author: Cole Petersen