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Bitcoin has pushed above $11,000 after consolidating under that pivotal resistance for a number of days. The leading cryptocurrency now trades for $11,070, pushing slightly higher after legacy markets closed on Friday evening.
While Bitcoin retaking $11,000 is a bullish sign, a historically accurate trader thinks that a bearish reversal here is likely.
The trader in question predicted towards the end of August that Bitcoin would drop to $9,700. He was proven right just days later when BTC was rejected at $12,000, then subsequently sunk to a low of $9,800 in the week that followed.
Should his call be accurate once again, there’s a high likelihood Bitcoin’s recovery from the $9,800 lows to these $11,100 highs will soon end.
Related Reading: Here’s Why This Crypto CEO Thinks BTC Soon Hits $15,000
Why Bitcoin Could Soon Drop From the $11,000 Highs
Bitcoin is primed to undergo a rejection at the $11,000 highs because there is a confluence of technical resistances in that range.
The aforementioned trader who called the ongoing correction noted these resistances in a recent tweet. They are as follows:
- $11,100 is the 61.8% Fibonnaci Retracement of the recent highs near $12,000 and the lows, making it a likely reversal level.
- There is the four-hour 200 simple moving average and 360 simple moving average at around $11,000.
- BTC printed a strong wick above the $11,000 resistance but has yet to hold above that level, potentially marking a support-resistance flip to favor bears.
- This is a weekend pump, meaning a CME futures gap has been created. Most CME futures gaps revert in the span of a week for Bitcoin.
- There is decreasing volume on this move higher, suggesting Bitcoin’s upward momentum is rapidly losing steam.
- Bearish divergences have formed between BTC’s price action and the four-hour RSI.
These six factors working on tandem will mean that Bitcoin soon corrects from these highs, then drops back to the downside.
Related Reading: It’s “Logical” for Ethereum To Reject At Current Prices: Here’s Why
All Eyes on Legacy Markets
Bitcoin could benefit from a rally in the legacy markets, though.
That’s to say, if the stock market opens green on Monday, Bitcoin could continue its ascent.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com These 5 Technical Trends Show Bitcoin Could Drop After Passing $11k
Image Credit: Refer to Source
Author: Refer to Source Nick Chong