Bitcoin Prices Struggle Near The $12,000 Level
Bitcoin prices have been trading within a relatively small range today, fluctuating close to $12,000 but failing to convincingly break through that level.
The world’s most prominent digital currency has traded primarily between $11,900 and $12,000 since roughly 10 a.m. EDT, CoinDesk figures show.
The cryptocurrency did manage to surpass $12,000, reaching $12,047.10, close to 1:30 p.m. EDT, but quickly fell to roughly $11,930 around 2 p.m. EDT, additional CoinDesk data reveals.
While the digital currency did pull back ever-so-slightly, it was still trading at roughly $11,900 at the time of this report, very close to the $12,000 level.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, helped shed some light on this recent price action.
“$12,000 is a strong resistance level and triggers profit-taking, which subsequently pushes the prices down,” he noted.
Bitcoin prices have enjoyed some notable gains lately, which makes it perfectly natural for traders to take profits, said DiPasquale.
Further, he emphasized that “$12,000 has rejected Bitcoin thrice in the recent past – on August 2, August 18 and September 2.”
“This makes it a level where market participants are naturally cautious of another rejection.”
Tim Enneking, managing director of Digital Capital Management, also spoke to this.
“Over the past five months or so, $12k has proven to be a barrier,” and “resistance grows ever stronger as the BTC price bounces off of it.”
As bitcoin continues to move within a relatively well-defined range, several analysts have provided input on the conflicting forces that have been placing both upward and downward pressure on its price.
Denis Vinokourov, head of research for London-based digital asset firm Bequant, weighed in on this matter.
“The recent rise in Bitcoin prices has been largely on the back of a wave of retail blinding buying into the recent news cycle, even as institutional traders have been far less bullish, and even selling significant amounts of crypto holdings,” he claimed.
“These diametrically opposed forces are what has largely kept Bitcoin in a range bound trade despite appearing to offer upside, and I would not be surprised to see BTC fail to significantly breach the $12,000 price level.”
Mark Warner, head of trading for London-based financial services firm BCB Group, also chimed in, highlighting the importance of the recent halving.
“The supply shock of the reduced Bitcoin block reward is working its way through the market, maintaining upward pressure on the price,” he stated.
As for downward pressure, Warner pointed to profit taking. The $12,000 level has provided “strong resistance” recently, so traders have been selling as the digital currency has approached this level.
In the near-term, bitcoin prices might continue to struggle, noted DiPasquale.
“Technical indicators like the RSI are overheated after the recent rise and the price needs consolidation between $11,500 and $12,000 before the market feels confident enough to tackle $12,000.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.