After pullback and consolidation, BTC will resume its bullish rally

The price of bitcoin retraced from the $12,000 level this Tuesday.Traders remain optimisticfor short-term prospects that may open after a period of consolidation below the key resistance level.

Asset stability near a major resistanceis often viewed as a sign of a continuation of the bullish trend. It suggests that sellers do not have enough pressure to move the price away from a significant mark.

Many market participants expect Bitcoin to bestay in the range of $ 10,500 - 12,000. If the rate does not fall below the support of $ 10,500, the bullish structure will continue, technical analysts say. There are, however, those who see obstacles to resuming growth in the foreseeable future.

Continuation of the bullish trend

The main argument in favor of the continuation of the bullishtrend is the long-term structure of the market. Analysts note that on charts with longer intervals, such as the monthly one, there is an obvious breakthrough of the range that has been preserved for a long time.

“This is only the very, very beginning of what,is likely to become a very large movement. Institutionals have finally followed what retail investors have known all along: this is the future and it is grossly underestimated. "- said the CEO of Global Macro Investor Raul Pal.

After approaching $ 20,000 at its peak in 2017Bitcoin remains in a multi-year range for a year, with a low of around $ 3,150 in 2018 and a high of around $ 14,000 in July 2019. At the same time, the recent rally above $ 11,500 marked a range break on the weekly and monthly charts.

Three Arrows Capital co-founder Kyle Davis argues that there may be less resistance to further rally. Referring to the Deribit options market data, he writes:

"Above $ 14,000 and up to $ 20,000 only air."

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Trader Scott Melker points out that bitcoin buyers take advantage of the opportunity to build up their positions at every low.

“This is buying season at lows. Any chance to add at a higher minimum is appreciated. This is a bullish chart. Point"- he declared.

Melker laid out a four-hour chart with four higher lows. Such a pattern is considered bullish in technical analysis and is interpreted in favor of buying power.

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Technical factors are supported by positive characteristics at the blockchain level. As noted by IntoTheBlock, the number of bitcoin hodlers has increased significantly recently.

“The trend towards Bitcoin hodling continues. As you can see in the image below, the number of Bitcoin hodlers has grown by almost 4 million over the past 12 months. As of August 9, a total of 20.47 million addresses held 11.51 million BTC for over a year "- she writes.

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Short term barriers

In the short term, Bitcoin can waittwo main obstacles: historical fractal and a slight drop in liquidity. Both factors may justify selling pressure, however, compared to what was observed a few weeks ago, market sentiment remains positive.

Trader Nick Yaremchuk states that a fractal canindicate a short-term decline. He compares bitcoin's current behavior to that of May. Three months ago, Bitcoin was in a similar trend and was looking for a breakout, but underwent a correction.

“The May 2020 fractal is playing again, where we were in the range for some time. I don’t think we will stay here for long, but it seems to me that we will have another decline. "He writes.

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At the same time, Glassnode notes a slight decrease in transaction activity:

“Liquidity fell slightly, losing three pointsdue to a decline in the transactional liquidity subcategory. This, in turn, was caused by a drop in the number of transactions on the blockchain over the past week. However, overall transaction values ​​remain high compared to pre-bull markets. ”

In a conversation with Cointelegraph, the head of research on the BeQuant platform, Denis Vinokurov, said that another refusal for $ 12,000 should not be considered a negative factor.

“Pricing and Consolidation After Strongthe recovery is evidence of a healthy flow of the market in both directions. Refusal is not necessarily a bad development, as it gives market participants an opportunity to assess the situation and compare the interests of speculative flows and long-term holders "- he said.

Vinokurov also noted that the recent rise in altcoins speaks of a risk-taking attitude of market participants and a positive attitude.

“It is curious that since the beginning of the year, the index of 100 assetswith a small capitalization grew by 74.51%, and with a large one - by 74.23%. The willingness of the market to take on more risks, as evidenced by the inflow of capital into assets with small capitalization, is generally a positive indicator "- he added.

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