The price of Bitcoin (BTC) is hovering at $11,300, close to a key technical level, which some traders believe makes the $11,500 “most important” level confirming the new bull market cycle for BTC.
If Bitcoin stays above $11,500 by August 10, it will be the highest weekly closing price of BTC prices since mid-2019. The weekly candle closing price in August 2019 was slightly higher than $11,500.
In other words, closing prices above this level will print the best weekly candles since the 2017 bull market. A closing price higher than $11,500 will destroy the Bitcoin market structure. At the same time, traders are closely watching the upcoming weekly candle close because many people believe that this may determine whether the bull market continues.
Technically, there is strong upside resistance before BTC makes a clean breakthrough of $11,500. An anonymous trader said:
“11.5k is the most important level on Bitcoin.”
Weekly price chart of Bitcoin with key resistance and support levels. Source: Immortal Technique
When the price of Bitcoin hit $12,000 on Aug. 2, some investors argued that BTC already broke its market structure. If so, BTC theoretically has room to surge to higher resistance levels at $14,000 and $17,000.
Sven Henrich, a trader at NorthmanTrader, believes Bitcoin could head toward $17,000. For the technical case for a prolonged rally to be intact, Henrich said BTC has to remain above $10,500.
As long as the price of Bitcoin stabilizes above $10,500, Henrich said a rally to $17,000 is possible, even if BTC then retraces. He said:
“Firstly note that a breakout is bullish if it can be successfully defended, meaning as long as $BTC can remain above the breakout trend line it has significant technical room higher… But note that inside the larger wedge consolidation a potentially much more bullish pattern has emerged, that of a potential inverse which would point to near 17,000.”
A technical case for an extended Bitcoin bull trend. Source: NorthmanTrader
Variables for both bull and bear cases
In the near-term, analysts point toward various macro factors that could boost the sentiment around Bitcoin. Most notably, the value of the United States dollar is depreciating.
Overall, trading volumes across various markets, including retail and institutional, are increasing. For example, the open interest of the CME Bitcoin futures market has just hit a record high. Despite mass liquidations on Aug. 2, BTC has remained relatively stable above the key technical support level at $10,500.
While more factors seemingly buoy the bull case for Bitcoin, there are two risks BTC faces in the short term. First, until $12,000 clearly breaks, the risk of overhead resistance remains. Second, several technical metrics, including funding rates and greed index (currently at 75% or “greed”), hint at an overheated rally.
However, it is uncertain whether positive on-chain metrics, such as the number of “HODLers” reaching an all-time high, can offset potential risks. For now, until BTC’s weekly candle closes above $11,500, the market remains cautiously optimistic as attention shifts to the U.S. dollar and stocks.