Bitcoin Shows Signs of Strength, But These Factors May Bolster Bears
- Bitcoin is currently attempting to break above $12,000, with the cryptocurrency rallying towards this level as Ethereum sets fresh 2020 highs at $475
- BTC’s current strength has yet to lift it past the key resistance it faces in the near-term at this level
- A failure to surmount it would be grim for its near-term outlook, and potentially spell serious trouble for where it goes next
- One analyst believes that there are a few factors that all spell trouble for BTC’s near-term outlook
- His bear-bias is validated by the cryptocurrency’s 50-day moving average, which currently sits around $11,000 and may be a “magnetic” force that draws its price lower
Bitcoin and the aggregated cryptocurrency market has been flashing some signs of strength today, with ETH rallying to fresh 2020 highs in an explosive movement while BTC remains caught below $12,000.
Although the $12,000 resistance is quite strong, some investors speculate that a break above this level could send BTC flying significantly higher.
That being said, there are a few factors that suggest downside is imminent in the near-term, including high funding and euphoria amongst bulls.
The cryptocurrency’s 50-day moving average also seems to indicate that BTC may soon reel lower.
Analyst: These Factors Spell Trouble for Bitcoin’s Near-Term Outlook
At the time of writing, Bitcoin is trading up at its current price of $11,900, which is around the price at which it has been trading at throughout the past several days and weeks.
Analysts are noting that where it trends next will likely depend in part on its reaction to $12,000, which has yet to be tested by the crypto.
One analyst is pointing to several bearish factors that may inhibit its near-term growth.
“High funding, best RR for shorts, clean invalidation, bulls euphoric… I’m short. Will update how this goes,” he explained.
Here’s What BTC’s 50-Day Moving Average Says About Its Near-Term Outlook
While speaking about the cryptocurrency’s near-term outlook, one analyst explained that he is watching for a decline down towards its 50-day moving average, which he calls a “magnetic” force.
This level currently sits around $11,000.
“BTC – The MA50 on the Bitcoin daily chart is magnetic,” he said while pointing to the below chart.
Image Courtesy of Chonis. Chart via TradingView.
If Bitcoin does see some near-term downside, it will be imperative that bulls defend the $11,000 region, as a break below here could strike a damaging blow to its macro market structure.
Featured image from Unsplash. Charts from TradingView.