Bitcoin
This Fundamental Indicator Shows Why Bitcoin Can’t Seem to Break $11,000
Cole Petersen | Sep 29, 2020 | 23:00
- Bitcoin’s price has entered a consolidation phase as it trades between $10,600 and $10,800
- The cryptocurrency’s strong uptrend in recent days stalled as soon as it approached $11,000, as the selling pressure at this level has proven to be quite significant
- Analysts are now conflicted on where it may trend next, as it all depends on whether $11,000 proves to be a surmountable level
- One analytics firm is now noting that there is one indicator that is providing insight into why BTC can’t seem to break this level
- They note that the network is currently seeing a “severe lack” of address activity, which points to underlying weakness
Bitcoin has been consolidating ever since bulls were able to push it up towards highs of $11,000. The move to this level earlier this week was promising, but it has since been followed by another prolonged period of sideways trading.
Where the entire market trends in the coming few weeks should depend largely on how it continues responding to the selling pressure that exists here.
If bears take control and push BTC lower, it may not find any strong support until $10,000, with a break below here being grave.
One fundamental metric that may be contributing to this slight weakness is a “severe lack of address activity” – according to one analytics firm.
Bitcoin Consolidates Below $11,000, But Weakness Grows
At the time of writing, Bitcoin is trading up marginally at its current price of $10,770. This is around the price at which it has been trading at throughout the past several days.
Yesterday, after advancing towards $11,000, BTC faced a sudden inflow of selling pressure that caused its price to slide as low as $10,500 on some trading platforms.
The decline to these lows was fleeting, but it highlighted the strength of BTC’s near-term resistance, as well as some underlying weakness amongst bulls.
Analytics Firm: Network Activity Flashing Warning Signs for BTC
Analytics platform Santiment explained in a recent tweet that there is currently a severe lack of address activity on the Bitcoin network. This points to underlying weakness amongst the crypto’s buyers.
“Why is BTC continuing to see drop-offs occur whenever we near $11k? Our DAA Divergence model indicates the network is seeing a severe lack of address activity. Today is the 5th most bearish output in the past 6 mths.”
Image Courtesy of Santiment.
The coming few days should shine a light on Bitcoin’s mid-term outlook.
Featured image from Unsplash. Pricing data from TradingView.
