Bitcoin and the entire crypto market are currently seeing some quiet price action. This newly established consolidation phase comes close on the heels of the recent surge that send BTC to highs of $11,400.
It appears that BTC is struggling to hold above $11,000, as it has been trading beneath this crucial support level for most of the morning.
Despite this not being a positive sign, it is important to keep in mind that the crucial support to watch is $10,500, and it has not yet shown any signs of being prone to breaking below this level.
One analyst is now noting that this ongoing price decline could be trapping short positions, laying the groundwork for Bitcoin to see a short squeeze that sends the benchmark cryptocurrency surging higher.
As for how high this could lead the digital asset, he is pointing to the $14,000 region as his next major upside target.
Bitcoin Flashes Some Signs of Weakness, But Could It Be a Bear Trap?
At the time of writing, Bitcoin is trading down just over 1% at its current price of $10,950.
It has been trading below $11,000 for most of the day, as buyers have been losing some of their strength due to the insurmountable selling pressure that has been established within the mid-$11,000 region.
Overnight, bears did push BTC as low as $10,800, but the buying pressure here proved to be quite significant and helped slow its descent.
While speaking about this current consolidation phase, one analyst explained that he believes it has put Bitcoin in “prime short squeeze territory” that could allow the crypto to rally significantly higher in the near-term.
“For my money BTC is currently doing that sidestep before another leg. Similar to the fractal following the breakout of the triangle (around $550). Many indicators will be showing overbought conditions but this is prime short squeeze territory for a honey badger in heat.”
Image Courtesy of Tyler Coates. Chart via TradingView.
Bulls may use the rising number of short positions that have emerged as a result of its consolidation phase to push the crypto even higher.
Analyst: BTC Bull Flag Break Means Move to $14,000 is Imminent
The same analyst also offered an optimistic price target of $14,000.
He explained in a separate analysis that the bull flag that Bitcoin broke as a result of its rally from the lower-$10,000 region produced this high price level as an upside target.
“BTC Bull flag target: $14,000,” he concisely stated while pointing to the below chart.
Image Courtesy of Tyler Coates. Chart via TradingView.
He also notes that his buy zone currently sits between $9,800 and $10,300.
Featured image from Unsplash. Charts from TradingView.