Bitcoin retests crucial trendline; is a fresh rebound next?

Bitcoin has managed to sustain its price above $11,000 despite the flash crash last week, and that strength could be its next fuel.

According to a crypto analyst’s opinion on 15 October, the $11,000 to $12,000 price level is a crucial one for Bitcoin to see a rebound.

As Bitcoin is retesting the level for the fourth time without breaking below, the analyst believes the coin has found a stable launching pad.

Judging from history

Bitcoin has a long history of more than 16 years, and certain patterns have repeated themselves many times without fail.

One of such patterns is a trendline connecting higher lows in an uptrend or lower highs in a downtrend. 

In Bitcoin’s case, it has been an uptrend which according to the analyst has held strong for the past three years every time a major correction such as the recent one hits the market.

He also added that historically, Bitcoin has bounced the strongest on this trendline which Bitcoin is retesting for the fourth time.

Consequently, he concludes that the bull run which some think is over, is only warming up and could be back in play soon.

Data from CryptoQuant suggests that long-term investors will soon enter another accumulation phase, which will eventually lead to a bounce.

Such whale accumulation could help generate the kind of momentum required for the strong Bitcoin bounce the analyst talks about.

What to expect

The reluctance to commence accumulation for now can be seen in the reduced Open interest which has declined to 656,840 BTC after last week’s flash crash. 

Due to this decline, investors are exercising caution until there’s clarity before entering the market again as shown by the Fear and Greed Index which is currently neutral at 42.

At the same time, the upcoming Fed’s decision on rate cuts is a critical determinant of not just Bitcoin but the entire market’s fate.