Bitcoin (BTC) price broke upward in the first half of October, resulting in a rally from $10,500 to $11,700. However, the momentum may be shifting once more as strength diminishes across the cryptocurrency market.
A similar setup also happened prior to Bitcoin’s latest upward break with sideways consolidation in BTC causing altcoins to drop south heavily, especially the Defi sector.
Rangebound and holding $11,000
But significant support at $11,000 is now a must-hold level to resume the bullish momentum, which may find difficulty clearing current levels as renewed coronavirus lockdowns are spooking investors.
Traders still remember the previous pandemic fear in March that caused prices of many assets across markets, including BTC, to drop severely.
BTC/USD 1-day chart. Source: TradingView
Bitcoin’s daily chart shows a strict breakout above $11,000, which was critical for any bullish momentum.
However, sustaining support at $11,000 is a must for the bullish case to hold weight, making a test of the upper range at $12,000 increasingly likely.
Gox Bitcoins stay put
Many investors tend to factor in a potential sell-off of the 150,000 BTC involved in the Mt. Gox fiasco each time a new deadline nears.
However, the deadline for the release of these Bitcoins was extended once again today diminishing these fears, or at least until Dec. 15, 2020
BTC/USDT 4-hour chart. Source: TradingView
Meanwhile, the smaller timeframe shows a similar picture with the $11,000-11,150 area being a critical zone to hold as support.
If that area is lost, a sharp dive is likely toward the $10,600 region. Even that CME gap below $10K may return as a topic of discussion.
However, as the $11,000-11,200 level is such an important support zone to hold, holding here would warrant a test of the range’s upper region, lined out in the upper chart, namely $11,800-11,900 and potentially even $12,100.
The real question is then whether Bitcoin has enough strength to break through that resistance level. Breaking $12K may see a massive bullish move that is likely to push up values across the entire crypto market.
Total market cap looks to test $250 billion
Total market capitalization cryptocurrency 1-week chart. Source: TradingView
The total market capitalization is still stuck inside a range. The upper part of the range is defined by the resistance zone between $380-405 billion. The lower part is found at $265-285 billion and is still untested.
At the start of a new bull cycle, previous resistance levels get tested for support before further continuation occurs.
A test of the $265-285 billion areas seems likely in that sense, as that would sustain a further continuation of the range-bound structure. Those range-bound constructions are also signs of the accumulation part of a new cycle.
Next to that, if the total market capitalization starts to move sideways, the 100-week and 200-week moving averages (MAs) will come in to play as potential support. Those indicators are significant signs of support and further continuation upward as they define bull/bear markets.
Likely short-term scenario for BTC/USD
BTC/USDT 6-hour chart. Source: TradingView
The most likely scenario would be more upside and a possible test of the $12,000 area after successfully holding the $11,000-11,200 region as support.
However, an immediate breakout above $12,000 is not likely unless the U.S. Dollar Currency Index (DXY) starts to really tumble. Such a case would suit a very bullish breakout for the price of Bitcoin, opening up the possibility of new multi-year highs.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.