Bitcoin witnessed some of the most intense volatility it has seen in months late yesterday evening.
After rallying up to highs of $12,000, BTC struggled to surmount the resistance at this level, which ultimately resulted in a sharp price decline that sent it reeling down towards $11,000.
It has been finding some strong support at this level throughout the past several hours, but it still remains in a precarious position due to the intensity of this selloff.
One technical impact this decline had on the benchmark digital asset is that it pushed it below a crucial long-term level that analysts were hoping BTC would post a weekly close above.
In order for its strong mid-term uptrend to continue further in the near-term, buyers need to recapture $11,500.
Because of this, the coming several hours will be crucial for understanding where Bitcoin trends in the weeks ahead.
Bitcoin Breaks Below Crucial Level Following Overnight Selloff
At the time of writing, Bitcoin is trading down just over 5% at its current price of $11,150. This marks a slight rebound from recent lows of $11,000 that were tapped on multiple occasions following last night’s decline.
This decline came about rather unexpectedly and struck a crushing blow to the overt strength that BTC had been establishing throughout the past few weeks.
Whether or not buyers are able to establish $11,000 as a strong base of support will likely be the factor that determines where it trends next.
One popular cryptocurrency analyst noted in a recent tweet that $11,530 is now the crucial level that traders need to closely watch.
This level has been established throughout the past year as a macro resistance, and the latest decline forced BTC back beneath it.
“BTC – a bummer that Bitcoin price back under that long term level for the weekly close tomorrow. Need to move back up and close over $11,531 but after a drop like this, I’m not sure that we do immediately. Doesn’t mean price can’t pump but volatility should be expected,” he said.
Image Courtesy of Josh Rager. Chart via TradingView.
BTC Sits at “Do or Die” Level Following Latest Breakdown
Another popular cryptocurrency analyst echoed the importance of this level, explaining that a weekly close above $11,500 would allow for further upside continuation.
In contrast, a break below this could lead to a consolidation period that bodes well for altcoins.
“This weekly candle close will be vital to understand the upcoming short term trend. Weekly close above = continuation. Weekly close below = consolidation/rejection (great for altcoins).”
Image Courtesy of Teddy. Chart via TradingView.
How Bitcoin trends in the coming few hours will be vital for understanding its mid-term outlook.
Featured image from Unsplash. Charts from TradingView.