Bitcoin has seen a remarkable rebound overnight that has allowed the cryptocurrency to bounce back towards its key resistance in the upper $ 9,000 region. This upswing comes when the week approaches quickly.
BTC is now trying to penetrate its weekly cloud resistance. Analysts point out that it is imperative for buyers to keep them above the lower limit of the cloud throughout the week's closing, as this could lead to crypto rising to $ 11,000.
Nevertheless, the cryptocurrency is seeing increasing funding rates on margin trading platforms.
This can be a negative sign for the cryptocurrency's short-term price action.
Bitcoin is pushing for critical resistance in the past as a deal is emerging weekly
Bitcoin will close its weekly candle in the coming hours.
The weekly close is a historically important event as it gives traders and investors an insight into the medium-term technical structure of the cryptocurrency.
At the time of writing, Bitcoin is trading over 4% at its current price of $ 9,800. This is a notable increase from the daily lows of $ 9,200 set at the end of yesterday's consolidation period.
The continued upturn in the cryptocurrency came after buyers had a strong defense of the lower $ 9,000 region.
It seems that this has become a strong level of support that could help strengthen the cryptocurrency in the days and weeks ahead.
This upswing has also allowed Bitcoin to penetrate its weekly cloud resistance.
A sustained hold above the lower limit of this cloud formation at around $ 9,500 before today's close could help the cryptocurrency rise significantly over the coming days and weeks.
A popular crypto trader talked about it in one last tweetand offers a diagram showing the fixed movement in this resistance region.
"BTC – piercing the weekly cloud resistance … must stay close for the top cloud target," he remarked, pointing to the table below.
If BTC recovers to the upper limit of this cloud, it could soon reach new highs of nearly $ 11,000 since the beginning of the year.
BTC's latest rally coincides with rocket funding
Financing on margin trading platforms like BitMEX gives investors an insight into the strength of price movements.
This recent rally has led to increased funding, which means long-position traders have to pay those who hold short positions – a trend that a popular trader in a has pointed out last tweet.
"OKEX's funding is suddenly very high again," he said, pointing to the graph below.
Greater funding essentially means that it is expensive to be long, and this premium indicates that demand is shifting towards long positions.
As it becomes more expensive to be in long positions, the chance of a trend reversal increases.
Featured image from Unplash.