Bitcoin has been caught in the throes of an intense bout of sideways trading for the past few weeks, with attempts to break above or below the upper-$ 11,000 region proving to be highly fleeting.
Earlier this week, the benchmark cryptocurrency rallied as high as $ 12,400 before it lost its momentum, with its price subsequently plunging to lows of $ 11,600.
The support at this level has held strong in the time since, with this decline kicking off another bout of consolidation.
Although in the short-term it remains somewhat unclear as to where BTC may trend next, it is essential to note that bulls have been able to defend a few crucial levels. This indicates that upside may be imminent.
However, one analyst is eyeing the $ 12,100 to $ 12,200 region as an ideal zone to open fresh short positions, as another rejection here could spark a bloodbath decline.
Bitcoin Shows Signs of Short-Term Strength as It Defends Key Support
At the time of writing, Bitcoin is trading down just over 1% at its current price of $ 11,730.
BTC has been trading between $ 11,600 and $ 12,000 for the past three weeks. The only exception to this trading range was seen earlier this week when bulls stepped up and propelled the crypto up towards $ 12,400.
After being rejected here, it traded sideways for just over a day before reeling back into its current trading range.
As for whether or not the current range will resolve in bull’s favor, analysts are noting that a crucial ascending trendline has been guarded throughout this consolidation bout.
One analyst put forth a chart showing the crypto’s reactions to this line, noting that it may help BTC break out of an ascending triangle it is currently caught within.
Image Courtesy of Teddy. Chart via TradingView.
Here’s the Price Region Traders are Looking to Short
If Bitcoin can continue trading above this trendline and possibly even push higher, analysts believe that it could soon tap a region that offers a prime shorting opportunity.
While speaking about this, one trader noted that he is preparing to short the region between $ 12,100 and $ 12,200.
His downside target sits around $ 11,400.
“I’d really want to load the shorts in $ 12,100-12,200,” he said while pointing to the chart seen below.
Image Courtesy of Crypto Michael. Chart via TradingView.
Where the crypto trends next will likely depend on its reaction to the critical trendline that it is currently trading above.
Featured image from Unsplash. Charts from TradingView.