Bitcoin's Rise Past $12K Could Begin To 'Test Investors' Mettle'
It is significant that bitcoin has broken the much-feted $12,000 resistance level. We saw the price touch $12,000 earlier this month but then took a significant drop and only flirted with reaching that mark again until this week.
The past 24 hours’ stability above $12,000 is indicative of a strong ‘hodling’ mentality amongst investors, as opposed to regularly trading in and out of the cryptoasset. On-chain data backs this up, showing that the amount of bitcoin on exchanges has been decreasing since we saw the lows registered in March, when the price fell below $4,000.
In my view $14,000 is the next resistance level that we need to see broken. If the price continues to climb, this would really test investors’ mettle. Indeed, I would expect to see exchange inflows increase as investors look to potentially crystallise their gains. This could push the price back towards $12,000 or below.
It’s also worth noting that bitcoin, like gold, has been inversely correlated to the Dollar Index, so the recent rally above $12,000 may also have been buoyed by the weakening dollar.
This article should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without ...
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