The price of Bitcoin breaks $11,000, but a major resistance level at $11,500 has emerged.<\/p>\n
The price of Bitcoin has stalled under $11,000 after rallying to as high as $11,488 across major exchanges. According to cryptocurrency trader and on-chain analyst Nik Yaremchuk, BTC faces strong resistance that dates back to 2018.<\/p>\n
Since February 2018, the $11,500 level has acted as a crucial resistance level for Bitcoin.<\/p>\n
When BTC first rejected $11,500 two years ago, the price of Bitcoin dropped below $7,000 in the following month.<\/p>\n
In August 2019, BTC rejected the same level. The price of Bitcoin declined to $7,800 in the month that followed.<\/p>\n
The weekly price chart of Bitcoin with $11.5k marked as resistance.<\/p>\n
Historical Data Suggests a Big Resistance Level is Ahead: Arguments For Sellers<\/p>\n
Whether the price of Bitcoin will struggle to break above $11,500 in the near term remains an uncertainty.<\/p>\n
Historical data indicates it is a large area of resistance for Bitcoin. But that can be comprehended as a price point of significance.<\/p>\n
If BTC surges past a level it failed to reclaim for years, it could indicate the formation of a potential bull run.<\/p>\n
Traders also consider a critical resistance level as an area with large selling pressure. Once that level breaks, it could trigger an uptrend.<\/p>\n
Some investors and technical analysts expect the upward momentum of Bitcoin to continue in the near-term. A large part of the expectation is the optimism for a breakout above $11,500.<\/p>\n
For sellers, there are three strong arguments to support a bearish scenario.<\/p>\n
First, the Bitcoin market is currently heavily skewed to buyers. The overwhelming majority of the market are longing Bitcoin and other top cryptocurrencies.<\/p>\n
Second, the funding rates of perpetual swaps are nearing levels that are not sustainable over a prolonged period.<\/p>\n
Perpetual swaps are a type of futures contract that does not have an expiration date. It is also the most popular form of Bitcoin futures contract.<\/p>\n
Funding rates of perpetual swaps across exchanges are surging because the number of long contracts is rising.<\/p>\n
Third, the multi-year resistance at $11,500 could serve as an area for sellers to defend.<\/p>\n
One Highly Optimistic Metric Suggests A Difficult Battle Between Bulls And Bears<\/p>\n
While sellers have several viable reasons to be bearish, the exchange inflows of Bitcoin are not increasing.<\/p>\n
The term exchange inflow refers to Bitcoin received by exchanges. Investors typically send BTC to trading platforms to sell and as such, exchange inflows often hint at heightened selling pressure.<\/p>\n
Data from on-chain market analysis firm Glassnode spotted no large-scale deposits of BTC into exchanges. That could indicate that whales are not selling BTC yet.<\/p>\n
Bitcoin balance on exchanges. <\/p>\n
Glassnode researchers explained:<\/p>\n
Despite BTC's recent price surge, we haven't seen large-scale deposits of funds into exchanges. So far, the Bitcoin balance on exchanges remains stable at around 14.5% of the circulating BTC supply.<\/p>\n
A key resistance level at $11,500 and high funding rates could raise chances of a market cool-off. But investors are seemingly optimistic in the medium-term, and expect BTC to overcome it.<\/p>\n
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