Bitcoin saw a notable selloff today that struck a heavy blow to the cryptocurrency’s technical outlook.
This decline sent it down to its range lows of $11,100 that have been tested on multiple occasions throughout the past few weeks. This level has continued acting as strong support for the benchmark digital asset.
Analysts are now noting that the reaction BTC continues posting as it trades just a few percent above this level should offer significant insight into its near-term trend.
Despite its overt weakness, one trader is pointing to a few key reasons for why he doesn’t believe that this latest movement invalidated the cryptocurrency’s mid-term outlook, mainly referencing the strength of the support just below its current price.
As such, he believes that Bitcoin will continue trading sideways in the near-term, likely ranging between $11,100 and $12,000.
Bitcoin Sees Sharp Selloff as Bears Gain Control Over Its Short-Term Trend
At the time of writing, Bitcoin is trading down just under 5% at its current price of $11,370. This marks a notable decline from its daily highs of $12,200 that were set yesterday.
Despite the resistance at $12,000, Bitcoin was able to break above this level and close its daily candle above it. That being said, the selling pressure proved to be too much for buyers to handle, as it was quickly followed by a sharp selloff.
Analysts are now noting that where the market trends in the near-term will depend largely on whether or not Bitcoin can continue defending its range lows at $11,100 – which were tapped for a brief second earlier today.
The reaction to this level was potent, as Bitcoin nearly instantly exploded back up towards $11,400. It has been ranging sideways ever since.
It is now imperative that bulls surmount the slight resistance that exists around $11,600, as a break above this level could lead it up towards $12,000.
Analyst: BTC Likely to Range Sideways in Coming Weeks
While speaking about this latest dip, one analyst explained that he does not believe this marks a trend-defining movement.
Although he advises that investors take profits on the way up, he notes that the strong support around $11,000 is likely to spark a bout of range-bound trading.
“It’s just one of those dropdowns. There’s a few very important reasons; – Continue to have liquidity to buy the dips. – Take profits on the way up, so you don’t give back to the market. Continuation of the ranging, likely.”
Image Courtesy of Crypto Michael. Chart via TradingView.
Unless this support is lost in the near-term, Bitcoin may be able to stabilize and even garner some greater momentum in the near-term.
Featured image from Shutterstock. Charts from TradingView.