The Bitcoin price has remained relatively stable above $10,000 in the past 18 days, surprising many analysts. The resilience of BTC above the key technical level has traders cautiously optimistic.
Su Zhu, the CEO of Three Arrows Capital, said a March-like 50% drop for Bitcoin is highly unlikely at this point. He said he is “flabbergasted” by the strength of BTC above a crucial multi-year technical level.
“ETH $320 as a bottom made sense and played out; BTC, I am actually flabbergasted by the strength shown at 10k and prob means 100k is more likely than 5k at this stage,” said Zhu.
In the short term, some traders are considering both bearish and bullish scenarios for Bitcoin.
Several traders say that if Bitcoin loses the $10,000 support convincingly, it could see a larger pullback.
However, if Bitcoin continuously stays above the $10,000 support level, it could lead to a bull market resumption.
One pseudonymous trader who accurately predicted the BTC bottom at sub-$4,000 in early March has been cautiously optimistic.
Bitcoin’s bearish scenario wholly depends on whether the dominant cryptocurrency could avoid a steep fall below $10,000. If the drop does not happen, the trader said the odds for recovery are decent.
“If BTC is in a bullish trend, this is a level of support that should hold. Historically at pullback levels that—in a bullish market—always held If not —we are in for far more trouble, but I think the odds for holding support and bouncing are good,” the trader said, referring to the $10,000 area.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said the entire cryptocurrency market is seeing a healthy corrective pullback.
On September 11, he said the market cap of all cryptocurrencies combined is $316 billion, above key support at $273 billion. Since then, the valuation of all cryptocurrencies have recovered to $351 billion.
“When in doubt, zoom out. We’re seeing a healthy corrective move in an upward trending market. Acting above 100-Week and 200-Week moving averages (MAs) equals bull. Green zone flip ($270 billion) equals bull,” Poppe said at the time.
There are two key support levels Bitcoin faces atop the major $10,000 area in the near term.
Poppe identified the two levels as $10,738 and $10,337, marking the former as the first support area.
For now, Poppe emphasized that the repeated rejection of Bitcoin from $11,200 suggests $11,257 represents “massive resistance.”
There are two variables in the short term that could affect the price trend of Bitcoin.
First, a CME gap at $9,650 is still open. A CME gap forms when the price of BTC moves higher or lower after the CME Bitcoin futures market closes during the weekend or holidays.
Second, September has historically been a poorly performing month for BTC. Since 2017, every single September monthly candle has closed red, and a similar pattern appears to be emerging. If BTC closes the month below $11,649, it would make it the third consecutive September monthly candle that closes red.