Bitcoin’s price action has grown stagnant over the past few days and weeks, with the cryptocurrency struggling to gain momentum as bulls and bears battle for control of its near-term trend.
Last week, the benchmark digital asset incurred some serious momentum after news broke regarding Square’s acquisition of $50 million worth of BTC.
Despite the overt strength this event created for the cryptocurrency, it has not been enough to propel it past the key resistance it faces at $11,600 and $12,000. Until these levels are surmounted, its near-term outlook remains unclear.
One trader is now pointing to Bitcoin’s volume profile for insight into where it may trend next.
This metric suggests that $12,000 is a pivotal level that will hold serious influence over BTC, with a break above this level opening up the gates for a move up to highs of $16,500.
Until it is firmly broken above, the crypto may continue extending its ongoing consolidation phase.
This news seemed to confirm that the trend of companies holding Bitcoin as a reserve asset is gaining steam, which could provide the asset with further buy-side pressure in the near-term.
Bitcoin Struggles to Build Momentum as It Nears Key Resistance
At the time of writing, Bitcoin is trading down just over 1% at its current price of $11,400. This is around the price at which it has been trading over the past few days, marking a slight decline from recent highs of $11,700 that were briefly tapped a few days ago.
This momentum is quite strong but has been stalling due to the selling pressure at $11,600. Each time this level is approached, bears move to regain control and push the crypto’s price lower.BTC Volume Profile Shows Just How Critical $12,000 Is
One analyst recently put forth an analysis of Bitcoin’s volume profile, noting that a break above $12,000 could be all that is needed for the cryptocurrency to rally towards $16,500 – a level that he describes as being a “minor speedbump.”
“Volume profile based on on-chain analysis. 12k is such an important level. It’s pretty much the only resistance left. After that it’s clear skies with only a minor speed bump at 16.5k.”
Image Courtesy of Byzantine General. Source: BTCUSD on .This analysis bodes well for Bitcoin’s near-term outlook and seems to indicate that a strong upside move could be imminent.
Featured image from Unsplash. Charts from .
