- Bitcoin has been caught amid an intense uptrend for the past few days and weeks.
- This has allowed it to post notable gains, despite previously showing signs of weakness as it consolidated at the low end of its macro trading range.
- The cryptocurrency has now shattered its long-lasting resistance at $ 10,500
- Analyst warns investors not to be overly optimistic when it comes to this latest rally
- He notes that BTC remains in a potential distribution channel that will not invalidate unless it posts a sustained break above this crucial resistance.
- The trader also notes that financing rates have soared, a historically bearish sign.
Bitcoin and the entire cryptocurrency market are caught amid an intense uptrend.
The benchmark digital asset saw a surge in buying pressure yesterday that allowed its price to skyrocket past its previous resistance level of $ 10,500.
In the time since then, it has shown some signs of stability as it hovers within the lower region of $ 11,000.
Whether or not BTC can continue to trade above $ 10,500 for an extended period of time, it could be quite telling about the state of its macro trend.
Speaking about this, an analyst warned investors not to become overly optimistic about BTC prematurely, as he notes that it remains stuck within a distribution channel.
Bitcoin raises over $ 11,000, but needs to keep key resistance above
As of writing, Bitcoin is trading over 11% at its current price of $ 11,050.
The cryptocurrency has been able to stabilize around this price level in the time after yesterday’s sharp rally.
Analysts are now pointing out that $ 10,500 is the key level to watch as BTC needs to stay above this level for an extended period of time in order for it to see further upside momentum.
Bulls Beware: These Factors Could Stop BTC On Its Tracks
While talking about $ 10,500, an analyst explained that it might be too early to be completely bullish on Bitcoin until buyers can establish it as a strong level of support.
“Although CT is euphoric with the 10k break, thinking we are going straight to athletics, I remain cautious until the price consolidates above 10.5k. This level is very important (potential UTAD for distribution). The scheme is identical.
Image Courtesy of il Capo of Crypto. Chart via TradingView.
The same analyst also notes that financing rates have skyrocketed across all trading platforms. This is a historically bleak sign that a rally has been overextended.
“As soon as the price has broken 10k, funds have skyrocketed on all exchanges. This is NOT a bullish sign. “
Although BTC is currently well above this crucial resistance level, until you can confirm that it has established a strong support of $ 11,000 or $ 10,500, you may still be prone to see the downside.
Featured image from Unsplash. Charts and pricing data via TradingView.
