Despite recent weakness, Bitcoin will hit $10,500 sooner or later and drive an upward trend

It’s been a rough few days for Bitcoin traders. After reaching $9,400, the cryptocurrency temporarily fell below $9,000 over the weekend. Hundreds of millions of BitMEX longs were liquidated in the process.

However, one analyst asserted that there is a good chance that Bitcoin could reconsider $10,500. Bitcoin surpassing that level could then lead to even bigger gains, or what some are calling “new highs.”

Bitcoin May Revalue to $10,500 Soon

Bitcoin could retest $10,500 as a “liquidity pool,” according to an anonymous trader with tens of thousands of followers. He said this could happen “sooner or later” due to the asset’s natural tendency to trade in liquidity.

The trader, who goes by the pseudonym SalsaTekila on Twitter, wrote, “BTC macro backdrop: I still think we are heading towards $13k in the medium term. Huge liquidity pools around $105k, price will move in that direction sooner or later.”

Chart shared by trader SalsaTekila on Twitter

Once (or if) Bitcoin reaches $10,500, it will need to break out of a relatively high frame and hold the $10,500 mark to confirm further upside.

In early June, one analyst said: “Bitcoin is about to explode. A break above $10,500 would break a more than 2-year-old symmetrical triangle, an 11-month-old expanding wedge, and an 8-month-old horizontal resistance.

Rob Sluymer of Fundstrat Global Advisors further echoed the significance of $10,500. He said: “BTC’s next directional move as bull and bear convictions are about to be tested. Bears can point to the $10,000-10,500 downtrend. Bulls have long-term uptrend (200-week SAM) support and BTC quickly bounced off the 200-week DMA this past week.”

Fundamentals support Bitcoin bull run

First, both retail and institutional traders have been accumulating Bitcoin in large quantities in recent weeks and months. Blockchain analysis company Glassnode reports that long-term Bitcoin investors have been quietly accumulating the asset over the past few months. According to their data, such entities have been accumulating on approximately 90% of the days in 2020.

Second, gold, a $10 trillion asset class, has been extremely strong. Since the beginning of 2020, gold prices have risen by about 15%, approaching the all-time highs set after the Great Recession of 2008. Analysts such as Bloomberg's Mike McGlone say that rising gold prices are fuel for Bitcoin's rise.

“In our view, the growing correlation with gold is a driver of Bitcoin’s price gains,” the commodity analyst said in a recent note. “With the highest correlation and beta to gold in 52 weeks, the first-born cryptocurrency should continue to rise for similar reasons to gold, driven by unprecedented easing from central banks around the world.”

Finally, despite the halving of the Bitcoin network block reward, Bitcoin miners continue to support the network. This has caused a macro indicator called the "Hash ribbon" to get closer and closer to sending the elusive buy signal at the beginning of the 2016-2017 bull run. (Baijiahao)