Bitcoin (BTC) price corrects after a failed breakout

Bitcoin (BTC) price has been dragged lower to test weekly support near $11,000 after the buyers failed to close above the $12,000 handle last week. 

Fundamental analysis: A beginning of another bull market?

The largest Bitcoin exchanges and crypto wallet apps such as Coinbase, Blockchain Wallet, Binance, BRD and others registered record-high combined downloads last month, largely thanks to the fact that many institutional investors turned to BTC in the midst of unparalleled coronavirus stimulus spending. 

This could indicate that BTC is "in the early stages of another bull market." Apptopia, analytics services provider, conducted research that showed that the number of new installs of top 10 crypto wallet apps climbed by 81%, compared to the year-ago period.

The growth of BTC and crypto wallet downloads was mostly fueled by the coronavirus lockdowns and the rising popularity of bitcoin and digital currencies in emerging markets. Bitcoin trading volume at crypto exchanges recorded a new high thanks to the BTC price soar at the end of last month.

A part of the Bitcoin trading community compared the recent increase in the interest in BTC among institutional and retail investors with the Bitcoin’s 2017 rally that sent its price from below $1,000 to around $20,000 in less than 12 months. 

Technical analysis: Failure drags the price action lower

Following a move up at the end of July, Bitcoin (BTC/USD) didn’t manage to break above the $12,000 mark in August. Although the price action traded briefly above this resistance line, the buyers failed in forcing a close at these levels, which then facilitated a correction lower. 

Bitcoin buyers are now hoping that a horizontal weekly support line around $11,000 will provide enough support. If this is not the case, we might see a pullback to $10,500 where a major horizontal support is located. 

Summary

An increase in download of crypto wallet apps and interest in BTC among institutional investors has resulted in a belief that Bitcoin might start another bullish run. In the meantime, Bitcoin price is trading just above $11,000, where a weekly support line sits.