- The strong momentum Bitcoin has incurred in recent weeks is now showing some signs of stalling as it struggles to break above $12,000
- This signals that the resistance at this level may be insurmountable, and may also be a sign of weakness amongst bulls
- Analysts are now noting that it has led to a surge in bearish divergences that seem to suggest a retrace is imminent
- BTC now has multiple key support levels throughout the mid-$11,000 region, but its macro support that bulls must defend it at $10,500
Bitcoin has been showing some subtle signs of weakness throughout the past couple of days as it faces stalling momentum.
Bulls have tried – and failed – on multiple separate occasions to garner enough buying pressure to break $12,000, but each attempt has failed.
The cryptocurrency is now caught within a consolidation phase at just below this crucial level.
The longer it trades here without pushing higher, however, the weaker it becomes.
Analysts are now noting that the cryptocurrency could soon see notable downside as a plethora of bearish divergences emerge.
Its inability to post a strong daily close above a crucial resistance also suggests downside could be imminent.
Bitcoin Shows Subtle Signs of Weakness as Uptrend Stalls
At the time of writing, Bitcoin is trading down marginally at its current price of $11,750. This is around the price at which it has been trading throughout the past few days.
Over the past 24-hours, BTC has made multiple attempts to test $12,000. Each time it moves up towards this level, it is stopped short by an influx of selling pressure.
This indicates that it may not be ready to post another leg higher just yet, and it may first have to retest some resistance level or consolidate further.
It is important to note that Bitcoin’s inability to post any sustained closes within the $11,800 region shows that it is currently plagued by underlying weakness.
These Bearish Divergences Could Send BTC Reeling Lower
This consolidation phase has given rise to a plethora of bearish divergences that may cause the cryptocurrency to see a notable retrace in the days ahead.
One analyst spoke about these factors in a recent tweet, explaining that he believes a short-term move to $11,520 is on the table, and he is looking for a close above its high time frame resistance for them to be invalidated.
“BTC: Some serious bear divs kicking in on 2HR and lower TF’s. 11520 looks on the table to me. With that said, divergences are often ignored during strong uptrends (especially divs under 1D / 4HR TF’s), so it’s difficult to call. HTF close above local highs n long only gang.”
Image Courtesy of Chase_NL. Chart via TradingView.
How BTC responds to its ongoing consolidation phase should offer insight into which direction it will move in the days and weeks ahead.
Featured image from Unsplash. Charts from TradingView.