Bitcoin’s price performance has been rather poor lately as the bulls and bears stumbled upon a dead end after rising into the middle of the $ 11,000 region.
Any drop comes with significant buying pressure, while any push toward $ 11,600 is quickly rejected by bears.
This has created a consolidation channel between $ 11,300 and $ 11,600. While neither of these levels has been broken yet, what is critically overcome first should give investors serious insight into the cryptocurrency’s near-term trend.
The support that BTC is currently trading under is quite significant and has helped crypto evade losses resulting from the turmoil in the traditional markets of the past few days.
One result of this consolidation phase was the diving trade volume.
While one analytics platform was discussing this trend, it stated that a rebound in volume coupled with a slight rise in prices will be a tell-tale sign that a spike is imminent.
Bitcoin consolidates after a strong push higher
At the time of writing, Bitcoin’s price is rising just under 10% at its current price of $ 11,480. Here has been trading in the last few days.
Following the news of Square’s purchase of $ 50 million worth of BTC, the cryptocurrency was exposed to strong buying pressure that drove it well into the middle of the $ 11,000 region.
After hitting highs of $ 11,700, it lost momentum and fell, kicking off the period of consolidation that has continued since then.
With no imminent catalysts for upside moves, it remains unclear what could trigger the next bout of trading activity that drives the cryptocurrency higher.
A possible business cycle agreement between the White House and Congress could tip the scales in favor of the cops.
Analytics Company: BTC Trading Volume Drops Last Week
According to recent data from Santiment, Bitcoin’s trading volume has collapsed due to the recent consolidation.
They talked about it in a tweet saying:
“September 24th through October 8th was the highest volume range Bitcoin had seen since mid-May. However, there was a sudden drop on October 9, and the daily transaction volume did not exceed $ 26.2 billion for the past week. ”
Image Courtesy of Santiment.
They go on to state that a potentially imminent shift in trading volume could signal when the next move up comes.
“Look for a surge in volume to coincide with a slight spike in price as one of the few early signs that BTC is making its move at $ 12,000 and beyond.”
However, if trading volume is accompanied by a decline, it could be a severe sign of BTC’s outlook.
Featured image from Unsplash. Pricing data from TradingView.