Bitazu Capital founding partner Mohit Sorout pinpointed that the volume of Bitcoin (BTC) declined since May. While the price of the top cryptocurrency has dropped since, its volume suggests it is not entirely bearish.
Due to the second rejection of Bitcoin at $10,500 this year, traders have suggested the possibility of a rounded top.
The price of Bitcoin shows a rounded top-like formation, but with declining volume. Source: Mohit Sorout
The declining trend of the volume remains as a variable that might potentially prevent a steep downtrend. It could suggest that the selling pressure on BTC has been lackluster.
The price of Bitcoin (BTC) is hovering at $9,240 following an overnight rally of 3.8%, following a strong recovery from $8,900.
Market structure or volume? analysts remain divided on Bitcoin’s short-term trend
Several metrics, including the declining volume and increasing “HODLing” activity, indicate an optimistic trend for BTC.
But, some traders argue that market structure is just as important as fundamental metrics when evaluating Bitcoin’s trend.
On whether market structure trumps metrics, Sorout noted that he remains neutral on the market structure of Bitcoin.
The price of Bitcoin saw lower highs in June, which typically are seen as a bearish market pattern. Yet, in the last two months, Sorout emphasized that there were consistent higher lows.
There are technical patterns that support arguments for both an upsurge and a potential pullback.
He said:
“[Market structure (MS)] is a big deal indeed, but all I see is price tightly compressed right now. I mean sure, lower highs in June haven’t really been an encouraging sign, but this 2-month range has seen consistent higher lows. So kind of 50:50 on the MS picture.”
The price of Bitcoin dropped below a key support level at $9,000 a total of eight times since May. Yet, it has recovered with strength following each correction.
Some analysts consider the current market structure of Bitcoin to be bearish, given that an important support level has been worn out. Others foresee a neutral market structure with optimistic fundamental metrics to back it up.
The weekly price chart of Bitcoin. Source: TradingView.com
Bloomberg researchers see a breakout above $10,000
In a report entitled “Bloomberg Crypto Outlook,” researchers wrote that a breakout above $10,000 is highly probable.
The report read:
“Our graphic depicts $10,000 as the price pivot that we expect is a matter of time to breach. The 2020 low close of about $5,000 on the back of the March asset swoon is a good definition of risk for sustaining the longer-term bull.”
The prediction echoes the positive sentiment around the declining volume trend, halving, and rising hash rate, which are considered as bullish fundamental factors.