Bitcoin has faced some intense buying pressure throughout the past few hours, allowing its price to see some immense gains. This upside comes as Ethereum and the rest of the altcoin market all consolidate, with attention shifting back towards BTC.
The cryptocurrency still has a way to go before it can see another immense rally higher. It is currently pressing up against a key high time frame resistance level that has been hampering its price action for several weeks.
Where it trends in the near-term will likely depend primarily on whether or not it can hold above this level – which exists at $16,500 – and flip it into support.
If it can firmly surmount this level, bulls could take full control and send it rocketing past $17,000. This would put a move to fresh all-time highs on the table.
However, one analyst is noting that Bitcoin’s on-chain data seems to indicate that it could be vulnerable to seeing some near-term downside.
He notes that the cryptocurrency’s active address count has seen a sharp downturn, which often indicates that losses are imminent.
Bitcoin Rallies Higher as Analysts Take Aim at $17,000
At the time of writing, Bitcoin is trading up over 4% at its current price of $16,600. This marks fresh yearly highs for the cryptocurrency, and it could soon push towards $17,000 if it can flip its $16,500 resistance into support.
Where the entire market trends next will likely depend primarily on BTC, as altcoins have been lagging behind its price over the past couple of weeks – typically rising a day or two after it does.
$17,000 remains a strong resistance level for Bitcoin, and whether this holds strong throughout the week will likely determine whether or not it makes an imminent move up to its all-time highs.
This On-Chain Metric May Spell Trouble for BTC
While sharing his thoughts on Bitcoin’s current outlook, one analyst observed a sharp decline in its active address count.
He contends that this could mean that any rally towards $17,000 or $18,000 will be fleeting – unless bulls shift this trend.
“Active addresses on sharp decline rn hinting that short-term uptrend is vulnerable and barely sustainable. If bulls want to visit 17-18k area for $BTC before any major correction, then they better bring back on-chain momentum asap.”
Image Courtesy of CryptoBirb. Data from Santiment.
The coming few days should shine a light on whether this Bitcoin rally will mark a sustainable push higher or be followed by a sharp selloff.
Featured image from Unsplash. Pricing data from TradingView.