Bitcoin (BTC) had a slow start in July with the token trading below $9200 throughout the month. The price finally broke the local resistance this Tuesday and entered an upward rally as demand for safe-haven assets, Gold included, gained traction as US-China tensions increased, pushing the price of the token as high as $9678 on Thursday.
The bullish breakout helped BTC doge a critical descending triangle and diagonal resistance on its way up, according to an analyst. But since then BTC experienced a pullback and is now trading slightly above $9500, as many traders looking at short term gains left their bullish positions.
While analysts expected the break above $9500 to push the assets price closer to $10k, the $9700 – $9900 region turned out to be too high for the bulls, as the fractals prompted many traders to take a step back.
Prominent crypto trader Koroush AK noted that Bitcoin’s bullish structure is breaking and that he won’t place “a serious long position” until BTC breaks the $9700 resistance.
Expressing similar views, another crypto analyst marked $9600 as the next resistance for BTC, adding that he “Will have to wait until we see further rejection or consolidation before I feel comfortable opening a long/short.”
However, one crypto advocate believes that BTC is at a much more critical position and could see price dip lower.
Ryan Scott, the co-founder of crypto investment advisor Blackroots, alerted an insane shakeout wick” might be imminent. He asserted that traders have turned “hyper-bullish” over BTC’s recent rally, but the asset is still trading in a lockdown range of $8,800-$10,500.
It has failed to breach the upper limit multiple times due the heavy selling pressure as traders look to take profits. A large wick forming during an upward rally is often indicative of the price diverting from its opening and closing rates.
A similar pattern was seen on March 13, 2020, when a long wick on BTC/USD chart took the price of the asset as low as $3858, even though the closing price was 46% higher at $5367.
According to the Tom Demark (TD) Sequential indicator on BTC’s 4-hour chart, downward pressure is expected to increase over the short term, and the next major support below $9500 is the $9,042 support level.
Analysts believe that if BTC fails to bounce back from this region and breaks support, it would develop lower lows, ending the bullish sentiment.
Institutional demand for BTC
On the other hand, Institutional interest in BTC continues to gain traction as a recent tweet from crypto analytics company Skew noted that the Chicago-headquartered CME Group has seen a surge in open interest (OI) in its Bitcoin futures product.
After a 16% percent bounce, the BTC futures OI has jumped higher and is up 30% this week and is slightly below $500 mln. A spike in CME BTC futures OI is a bullish sign for Bitcoin over the long term as investor interest grows stronger in Bitcoin derivatives.
This week also saw a growing correlation between BTC and Gold as both the assets rallied this week.
According to Alex Saunder, founder of crypto media outlet Nuggest news, if Gold breaks its all-time high of $1920, BTC might be following with a major push towards $10,000. He said:
The US-China tensions might also see people turning towards Bitcoin and Gold in times of crisis, which would further add to its current rally.
At the time of writing, BTC is trading at $9,539 and is up 0.2% on the daily. This is a crucial point for the number one cryptocurrency as its next move will tell where the price is heading.