Bitcoin kicked off the week of Oct. 19 with a bang. The flagship cryptocurrency saw its price surge nearly 4.5% to trade at a high of $11,995 on Oct. 20. While many investors are seeing profits, different metrics show that this Bitcoin surge may not be done.
Bitcoin sits on top of a massive supply wall
From a fundamental standpoint, Bitcoin could be on the cusp of a new bullish cycle. IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model shows that Bitcoin sits on a massive supply barrier. Roughly 3.5 million addresses had previously purchased nearly 2 million BTC between $11,240 and $11,940.
Such an important area of interest may have the strength to keep falling prices at bay in the event of a correction. Holders within this price range will likely buy more tokens to avoid seeing their investments go into the red. That means the odds currently seem to favour the bulls, and an extension of this Bitcoin surge.
On the flip side, the IOMAP cohorts show little to no resistance ahead, even after the recent Bitcoin surge. The only crucial hurdle to pay attention to lies at $12,160. Here, fewer than 123,000 addresses are holding approximately 60,000 BTC.
Technical analysis: BTC isn’t out of the woods yet
Although the fundamentals show that a bigger Bitcoin surge could be imminent, the technicals add importance to the $12,160 resistance level. This hurdle sits next to the upper boundary of an ascending parallel channel that has been able to contain BTC’s price action since the September market crash.
Each time Bitcoin has risen to the top of this technical formation, it’s dropped to hit the lower edge, then rebounded. This behaviour is consistent with the characteristics of a channel.
If history repeats itself, a spike in sell orders around the current price levels could push Bitcoin towards the channel’s middle or lower boundary. These levels of support sit at $11,500 and $11,000, respectively.
Therefore, investors may need to wait for a clear break of the $12,160 resistance. Turning this barrier into support could see Bitcoin surge by more than 10% towards the next area of interest, around $13,200. This target is determined by drawing a parallel line equal to the channel’s width.
Investors grow greedy amid Bitcoin surge
As the U.S. presidential election approaches, uncertainty grows about the impact that the results could have on the crypto market. Some prominent crypto analysts have stated that if the Democratic nominee wins, the stock market may crash, igniting an exodus of investors to Bitcoin. As Joe Biden continues to lead the polls, crypto enthusiasts are becoming greedier over time.
Nonetheless, greed is not necessarily a positive sign, since it tends to lead to slumping prices. Given the ambiguity between the fundamental and technical metrics, you should remain patient, waiting for a clear break of resistance. Now that Bitcoin sits at a pivotal point, a dose of patience can play a big role in benefiting from the next Bitcoin surge.
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