Yesterday Bitcoin unsuccessfully attempted a break above its mid-term resistance of $ $9,800. This position would allow for Bitcoin to finally climb above $10,000. Its rejection at $9,800 was followed by a retracement to the $9,400 support before bouncing back above $9,550. But despite the strong bounce, Bitcoin looks stranded and might be set up to trade within a tight range midterm.
This could lead to a major price capitulation. The bulls have been targeting the $10,000 position for weeks now and have every time come up short. With the halving now over and behind investors’ minds, taking away one of the biggest potential triggers, there could be some exhaustion after weeks of bullish pressure.
Subsequently, miners, as we have reported, are shutting down leading to a drastic drop in hash rate. If Bitcoin hesitates at the $9,500 position, this could trigger a wide sell-off that could see Bitcoin go back to previous support of $8,800.
Although Bitcoin looks relatively stable, data from Skew shows that speculation over the future of Bitcoin is in record highs. The data provider has shown that Bitcoin CME options open interest is ten times higher this month.
This indicates volatility throughout the month. For the keener investor, they will remember that when these futures expire, Bitcoin dumps.
What Are Key Indicators Signalling?
Looking at the Fear and Greed Index, Bitcoin looks to be moving from fear to the greed region. The daily chart shows that today investors are in the Fear zone but closing in the Greed region witnessed last week.
Analysts have previously noted that investors could hop on when there is fear and not greed. if Bitcoin crosses over to the greed zone, we could see buyers’ numbers drop leading to a market slump as supply surpasses demand.
Bitcoin’s daily volume is showing positivity as it is in the highs of $55 billion when Bitcoin has rallied this week. This number combined with the high market dominance will ensure that Bitcoin can hold higher support and easily break resistances.
Bitcoin, however, is at risk from altcoins which as we reported have been gaining traction. Post halving, speculators who dumped altcoins to profit on Bitcoin are set to make a return seeing Bitcoin lose in dominance and price.