Bitcoin Prepares For New 2020 Highs As Trading Nears $12,000

Bitcoin prepares for new 2020 high as the bulls are testing the $12,000 level but there is still a number of bearish divergences that offer traders a reason to be careful when trading so let’s read more in our latest Bitcoin news.

BTC faces a near-term resistance at $12,000 which will decide the possible bullish break or another medium-term reversal zone. The bearish divergence between the rising prices and falling daily active addresses signals another exhaustion of the bullish momentum. The outcome of the latest US Stimulus talks could bring the heat to the bullish breakout or could dampen the momentum. Bitcoin increased by more than 3% since the weekly price opening as the pioneer cryptocurrency trades in the touching distance of the psychological $12,000 resistance level. The surge in Bitcoin came right after the Federal Reserve Head Jerome Powell discussed the possibility of rolling out a central bank digital currency and how the Libra project will reinforce the complexities of launching a national cryptocurrency.

With the latest fundamental outlook looking bullish, a break above the $12,000 could start another rally to the $13,000 level which means Bitcoin prepares for a new 2020 high. Traders should treat the move with a degree of caution as the lower time frame analysis showed that the bearish divergence developed on the MACD indicator as the cryptocurrency broke the $11,000 level earlier this month. Crypto traders use this trend as an indicator to reveal the rising or falling momentum of the asset’s trend so a crossover of the MACD and the signal line are sitting on the upside which indicates an incoming bullish trend with a crossover downside that signals a bearish trend.

The current four-hour price chart shows that the bears are getting smaller while the prices increase which confirms negative price divergence. The MACD signal line is showing negative price divergence and started dropping with the Bitcoin prices rising. If bitcoin starts a pullback from the current levels and trades below the weekly opening price, the risk of dropping to $10,000 increases. The data from the on-chain crypto sentiment platform Santiment shows that a clear-cut bearish divergence between the increasing prices and falling number of active addesses was forming in the past few days which signals a potential slowing of bitcoin’s buying activity. Santiment tweeted:

 “Bitcoin’s mild climb of around +3% this weekend was a bit of a surprise, considering the 730.5M daily active addresses transacting on the network Sunday was the lowest mark since June 28th. Our model points to a fairly clear-cut bearish divergence forming.”