Bitcoin’s price action has been rather lackluster as of late, mostly trading sideways within a relatively tight trading range between $7,000 and $7,700, finding strong support at its lower boundary and insurmountable resistance at its upper boundary.
Today, BTC incurred some tempered bullishness that allowed it to climb as high as $7,400 before it met some resistance that led it lower. One analyst is noting that it is important Bitcoin closes above $7,340 in order for it to see further upwards momentum.
Bitcoin Touches Key Short-Term Resistance, Here’s Why It’s Important
At the time of writing, Bitcoin is trading up marginally at its current price of $7,320, which marks a notable climb from its recent lows of just over $7,000 that were set during a sharp and fleeting dip yesterday, and a slight decline from its daily highs of $7,400 that were set just a couple of hours ago.
Over the past couple of weeks, Bitcoin’s bulls have made multiple attempts to push the cryptocurrency towards the upper-$7,000 region, but each of these attempts have been met with significant selling pressure that leads to the formation of large candle wicks – which is typically a bearish sign.
Despite this, bulls have been able to defend the crypto from dipping back into the $6,000 region, which may mean that buyers are stronger than some analysts previously thought them to be, and that they may soon propel the crypto higher.
Jacob Canfield, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that $7,340 is an important level for Bitcoin to close above, as it could confirm that bulls are currently in control of the cryptocurrency.
“Nothing too crazy here. Hoping for a $7340 break on a $7277 entry. Reduced my risk to .3% on account of the stop hunts lately. Raised stops to lock in profit. Looking to TP at 7400 for a .6BTC profit and potentially flip short around $7450/$7500. Need to see the reaction there,” he explained while pointing to the chart seen below.
https://twitter.com/JacobCanfield/status/1210980799597731841?s=20
It is important to note that some analysts believe that Bitcoin’s current price levels will be a long-term top for the cryptocurrency, as Storm, a popular crypto analyst on Twitter, recently noted that BTC currently looks “toppy.”
“$BTC.D looks very toppy at these percentage points. What’s your take on it? Am I missing something, head hit concrete?” he explained while pointing to the chart seen below.
$BTC.D looks very toppy at these percentage points.
What's your take on it? Am I missing something, head hit concrete? pic.twitter.com/1XsDFwRdzm
— storm (@stormXBT) December 28, 2019
In the near-term, how Bitcoin responds to the resistance level it is currently pushing up against will offer significant insights into where the cryptocurrency is heading next, as a failure to break past this level could mean that another visit to the $6,000 region is imminent.