Crypto traders cautious on Bitcoin price as rally to $11.7K goes sour

After the price of Bitcoin achieved $11,720 on Binance, traders began to turn slightly skeptical on the dominant cryptocurrency.

If Bitcoin demonstrates weakening momentum below $11,300, the market would likely become vulnerable.

Considering the array of positive events that buoyed the price of Bitcoin in recent weeks, a near-term pullback could be healthy.

Edward Morra, a Bitcoin technical analyst, cited three reasons for a pullback to the $11,100 level, noting that BTC hit an important "Daily supply" level when it rallied to $11,700.

The cautious stance of most traders is likely the result of two factors that have been consistently emphasized by analysts since September: BTC's strong 15.5% recovery within merely 19 days and little resistance above $13,000.

Cathie Wood, the CEO of Ark Invest - which manages over $11 billion in assets under management - also pinpointed the $13,000 level as the most important technical level for Bitcoin.

It remains unclear whether BTC can regain the momentum for a rally above $13,000 in the short term, leaving traders cautious in the near term but not strongly bearish.

Various on-chain indicators and fundamental factors, such as HODLer growth, hash rate and Bitcoin exchange reserves indicate a strong uptrend.

On top of that, according to data from Santiment, developer activity of the Bitcoin blockchain protocol has continuously increased: "BTC Github submission rate by its team of developers has been spiking to all-time high levels in October. This is a great sign that Bitcoin's team continues to strive toward higher efficiency and performance going forward."

For alternative assets and stores of value, like Bitcoin and gold, inflation and negative interest rates are considered persistent catalysts.