These 5 Technical Trends Show Bitcoin Could Drop After Passing $11k

Bitcoin has pushed above $11,000 after consolidating under that pivotal resistance for a number of days. The leading cryptocurrency now trades for $11,070, pushing slightly higher after legacy markets closed on Friday evening.

While Bitcoin retaking $11,000 is a bullish sign, a historically accurate trader thinks that a bearish reversal here is likely.

The trader in question predicted towards the end of August that Bitcoin would drop to $9,700. He was proven right just days later when BTC was rejected at $12,000, then subsequently sunk to a low of $9,800 in the week that followed.

Should his call be accurate once again, there’s a high likelihood Bitcoin’s recovery from the $9,800 lows to these $11,100 highs will soon end.

Why Bitcoin Could Soon Drop From the $11,000 Highs

Bitcoin is primed to undergo a rejection at the $11,000 highs because there is a confluence of technical resistances in that range.

The aforementioned trader who called the ongoing correction noted these resistances in a recent tweet. They are as follows: 

  • $11,100 is the 61.8% Fibonnaci Retracement of the recent highs near $12,000 and the lows, making it a likely reversal level.
  • There is the four-hour 200 simple moving average and 360 simple moving average at around $11,000.
  • BTC printed a strong wick above the $11,000 resistance but has yet to hold above that level, potentially marking a support-resistance flip to favor bears.
  • This is a weekend pump, meaning a CME futures gap has been created. Most CME futures gaps revert in the span of a week for Bitcoin.
  • There is decreasing volume on this move higher, suggesting Bitcoin’s upward momentum is rapidly losing steam.
  • Bearish divergences have formed between BTC’s price action and the four-hour RSI.

These six factors working on tandem will mean that Bitcoin soon corrects from these highs, then drops back to the downside.

All Eyes on Legacy Markets

Bitcoin could benefit from a rally in the legacy markets, though.

That’s to say, if the stock market opens green on Monday, Bitcoin could continue its ascent.

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