Hitting This Key Area Will Trigger a Quick Bitcoin Price Boom

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By CCN Markets: Since August 15, in less than five days, the bitcoin price (BTC) has increased from $9,500 to $10,700 by well over 12 percent against the U.S. dollar.

The bitcoin price has demonstrated a short term reversal after dipping to as low as $9,500 last week

The bitcoin price has demonstrated a short term reversal after dipping to as low as $9,500 last week. | Source: coinmarketcap.com

At the day’s high, the bitcoin price spiked to as high as $10,950 on major regulated cryptocurrency exchanges, demonstrating a strong short term trend reversal.

Traders await bitcoin to break key resistance

Many traders foresee a high level of volatility as BTC attempts to break above a key resistance level at the $10,900 to $11,000 range.

Scott Melker, a trader at Texas West Capital, stated that $10,890 has been acting as a strong resistance level following the breakout of bitcoin.

“This is how I am watching it on the hourly chart. Holding the major ascending support, presently in a small trading range with a likely pennant formed. Red line ($10,890) is key resistance,” he said.

After the bitcoin price briefly broke above the resistance level, Melker said that the trading sentiment has become difficult for both bears and bulls in the bitcoin market.

He added:

“Beautiful. Hourly candle (which was also the daily close) closed above the red resistance and is presently retesting as support. Price moved out of the pennant and trading range after wicking up and down to make life difficult for bulls and bears alike.”

Josh Rager, a technical analyst, explained that in a larger time frame, a break above $10,977 as a resistance level could signal the start of a new bull run for the dominant cryptocurrency.

Rager stated:

“I wanted to see it over $10,800 and it did close, short term bullish Will continue to watch the order book and want to see continued follow-through from buyers (currently under weekly open from two weeks ago – will act as resistance).”

Effect of Bakkt remains a mystery

Bakkt, the first physically-settled bitcoin futures clearinghouse is expected to fully open on September 23, offering contracts that could actually have an impact on the bitcoin price.

“On Sept 23rd we’re set to launch two physically delivered bitcoin futures contracts: Bakkt Bitcoin (USD) Daily Futures; Bakkt Bitcoin (USD) Monthly Futures,” the Bakkt team said on August 19.

Unlike cash-settled futures contracts offered by CME Group and other clearinghouses, which still process a significant portion of the global bitcoin volume, investors that purchase contracts through Bakkt will be able to physically hold BTC through the company.

While many investors anticipate that Bakkt would improve the liquidity of bitcoin, its potential effect would depend on the demand portrayed by investors in the market.

Click here for a real-time bitcoin price chart.

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