Bitcoin, the world’s largest cryptocurrency, rallied as high as $12,400 at the start of the week before losing its momentum.
The asset is now struggling to climb higher as its price struggles to break above the upper-$11K region.
In yesterday’s trading, the coin dipped to form a swing low at $11,581 before recovering some gains. However, there are signs that the BTCUSD pair has started declining.
Case in point, BTC lost a further 2% overnight to trade at $11,563 during press time.
BTCUSD Chart | Source Tradingview
The latest BTC price decline has cast doubt over whether its recent rally is still intact, and many investors aren’t quite sure where the world’s benchmark crypto may trend next.
BTC Bulls Defend Key Support
Even as uncertainty grips BTC’s current price trajectory, it is essential to note that bulls have managed to defend the crucial support near $11,500 over the past three weeks.
BTC has consolidated between $11,600 and $12K, with the only exception coming on Monday, where bulls propelled the coin towards $12,400. After being rejected here, the asset corrected lower to settle in the range mentioned above.
As BTC shows signs of strength by holding the $11.5K support, analysts note that a central ascending trend line has been defended throughout the latest consolidation phase.
Analyst Teddy Cleps shared the chart below, highlighting BTC’s reactions to this trendline. He explained that the line could help BTC break out of its current ascending triangle.
Bitcoin Trendline Chart by TeddyCleps | Source TradingView
Should the world’s leading crypto continue trading above this trendline, analyst crypto Michael believes that it could reach a region that offers a significant shorting opportunity.
Michael tweeted that he is preparing to short the region between $12,100 and $12,200, while his downside target sits near $11,4K.
Crypto Market to Face a Significant Hurdle
According to the Bloomberg Galaxy Crypto Index, a tool that measures top crypto assets’ performance, the market is likely to face a significant retracement of up to 10% after its recent rally.
This retracement means that further gains for many top coins such as BTC and ETH could be hard to achieve in the short term. Nevertheless, the crypto index still shows an uptrend from a macro perspective.
Bitcoin makes up approximately 30% of the Bloomberg Galaxy Crypto Index, and its recent price action prompted one analyst to predict a BTC price recovery shortly.
Simon Peters, an analyst at investment platform eToro, commented on BTC’s price trajectory stating:
“I would expect to see exchange inflows increase as investors look to potentially crystallize their gains. This could push the price back toward $12,000.”