Bitcoin has once again extended its long-held bout of sideways trading. The cryptocurrency has struggled to garner any notable momentum as it continues trading within the mid-$9,000 region.
Its ability to capture a strong foothold within this price region after facing some signs of weakness earlier this week does appear to be a positive sign.
That being said, there are a few factors that point to underlying weakness, including its three rejection at $10,500 over the past six months, its countless rejections at $10,000, and the fact that it has been setting lower highs throughout the course of its consolidation phase.
In spite of these overtly bearish factors, analysts still remain confident that the cryptocurrency could be well-positioned to see some notable upside in the mid-term.
This upside could be provided by two primary factors: BTC’s ability to maintain its position above its 100 and 200-day moving averages, and its robust trading volume.
In order for these factors to spark a sharp uptrend, there’s a key level buyers must hold the crypto above in the days and weeks ahead.
Bitcoin Still Strong Despite Showing Signs of Weakness
At the time of writing, Bitcoin is trading down marginally at its current price of $9,400. This is around the level at which it has been trading at throughout the past several days and weeks.
Earlier this week it did attempt to retest the resistance laced in the upper-$9,000 region but was stopped short by a rejection at $9,600.
This is just one of the many overt signs of weakness that the benchmark digital asset has flashed in recent times, but it is important to note that it still remains fundamentally strong for a couple simple reasons.
One analyst recently pointed to two factors for why his outlook on BTC in the mid-term remains bright.
These factors include its ability to remain above both its 100 and 200-day moving averages, as well as it forming a strong volume profile despite its lackluster price action as of late.
“Bitcoin: Just a picture sharing the significance of the 100-Day and 200-Day MA. And we’re acting above that, so no reason to be extremely bearish (in my opinion). Volume also nice,” he explained.
Image Courtesy of Crypto Michael. Chart via TradingView
Here’s the Key Level Bulls Must Defend to Catalyze Further Upside
In order for Bitcoin to push higher in the near-term and confirm this underlying strength, there’s a key price region that must be defended.
The same analyst explained that the price region between $9,200 and $9,250 is a key support area, and an ardent defense of this could allow for an upwards trend continuation.
“Bitcoin: Crucial level held and we are back in a narrow range. As long as $9,200-9,250 holds, I suspect continuation. Next job; breaking and flipping $9,550-9,600. If we do, the grind towards the highs can start. Acceleration above $10,250-10,500 towards $11,500.”
Image Courtesy of Crypto Michael. Chart via TradingView
How it responds to this key support should provide significant insight into where it trends next.
Featured image from Shutterstock.
Charts from TradingView.
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