Bitcoin’s overnight swing to highs of over $9,900 has led the cryptocurrency to enter a firm bout of sideways trading that has persisted throughout the past day.
The cryptocurrency’s market structure has been bolstered by its ability to find some stability in the mid-$9,000 region despite the multiple rejections it has faced at $10,000.
Analysts are now noting that the next weekly candle close is likely to define which direction it trends in the weeks and even months to come.
One trader is even going so far as to note that a failure for it to close this candle above $10,000 could result in a dire decline that leads it into the lower-$8,000 region, forcing BTC to erase much of its recent gains.
Bitcoin Continues Consolidating as Bulls Vie to Break $10,000 Resistance
Yesterday evening, Bitcoin began inching higher. This movement ultimately resulted in an upswing that led the benchmark cryptocurrency to highs of just under $10,000.
BTC then lost its momentum and began declining, ultimately finding some significant support around $9,400 that slowed its drop.
From this point, BTC has once again found itself caught within its long-held trading range between roughly $9,500 and $9,800, currently trading up marginally at its current price of $9,730.
Nik Patel, a prominent cryptocurrency analyst, spoke about the benchmark digital asset in a recent blog post, explaining that the cryptocurrency could be well-positioned to push higher if it is able to close above $9,970 in the coming couple of days.
“If it closes above $9970, I’d expect expansion to the upside. Until then, it’s primarily a case of sitting tight, although the reaction off the 200-day moving average and close back above trendline resistance does mean that I favour more upside over the coming weeks,” he noted.
If this level is firmly surmounted, BTC will likely face some resistance at $10,100 and $10,500.
BTC Could See a Major Decline if It Fails to Close Weekly Candle Above $9,970
Patel further emphasized the importance of the $9,970 level, explaining that an inability for it to close above this level prior to its weekly close this coming Sunday could open the gates for a major decline.
He even notes that Bitcoin could fall as far as $8,160 until it finds any notable support.
“If that candle closes below $9970, I’d expect the following week to be bearish with a move down to $8160.”
If this potential decline does occur, Bitcoin would then be trading at lows not seen since late-April. This could invalidate its bullish market structure and open the gates for the cryptocurrency to see even further losses.
Featured image from Unplash.