Bitcoin saw a strong intraday rally to break the $12,000 resistance level for the second time in just several weeks, but quickly failed to sustain the bullish momentum and quickly crashed to $11,200.
The last time the coin reached that number was in mid-August, it surged to the $12,400 level, but it was unable to keep up with the momentum and returned to the low $11,000 range a few days later.
Despite numerous attempts to jump above $12,000 and hold it, traders are warning of a sudden sell-off in the cryptocurrency market especially as the direction of the coin is still uncertain, and to confirm which direction it will first have to close above $11,700 or below $11,000, from In order to detect clear bearish or bullish scenarios.
Factors causing the decline of Bitcoin
There are three factors that can cause the price of Bitcoin to drop Pepperstone Throughout the month of September, first: the US dollar started to recover at a major support level, second: September is historically a slow month for Bitcoin, and third: the consolidation after a big rally is typical for the currency.
The abundance of potential catalysts may also enhance Bitcoin's bullish momentum, in recent months several indicators have pointed to a positive trend for the currency in the medium term, and declining exchange reserves and growing institutional demand support the bullish case for the currency in the long term.
The boom of the first cryptocurrency in the world to reach the level of $ 12,000 was short-lived each time, which made many people realize that the strength of Bitcoin is still isolated and surrounded by fears, and if it does not cross the level of $ 12,000 again should not be expected Many traders see the currency reach all-time highs again anytime soon.
At the moment the coin is moving at a slow and steady pace, its performance should improve in the coming weeks, what Bitcoin seems to be doing is rising little by little every day, and $12,000 is likely to be in its future again although we probably won't see it hit that territory Again until at least September.
It is worth noting that Bitcoin repeated the behavior of reaching the target level several times, during the months of May and June the great resistance was at $ 10,000 and the currency was able to cross it at the beginning of the two months, but it was failing to maintain it due to the lack of a strong reason to stay.
But after several attempts, it managed to penetrate and preserve it, after the United States paved the way for second stimulus measures, in addition to the banks announcing that they had obtained the green light to provide cryptocurrency custody services to their customers, as soon as this news was revealed, the Bitcoin moved to the level of $ 10,000 and has been there since That moment.
Thus, Bitcoin will need a massive event to permanently exceed $12,000, mostly requiring something related to mainstream finance such as banks that provide services to cryptocurrency.