The fact that the price of Bitcoin (BTC) couldn’t cross the $ 12,000 resistance level meant a pullback was imminent.
However, The rapid pace of the retreat was not expected by the markets and surprised many traders. The critical support zone of $ 11,100 offered no support and resulted in the current decline towards the region of $ 10,500.
Daily performance of the cryptocurrency market. Source: Coin360
Bitcoin price is falling in line with the weakness of the stock markets
Bitcoin’s price wasn’t the only thing showing weakness today, But the US stock market is also experiencing a sell-off.
One day chart for the BTC / USDT pair. Source: TradingView
The daily chart for Bitcoin shows a clear rejection of the $ 12,000 zone, after which there was a sharp decline. Such a drop was not unexpected given the $ 12,000 denial. However, upon closer inspection, we will see if the accelerated decline to $ 10,500 was a result within range.
3-hour chart for the BTC / USDT pair. Source: TradingView
Short time frames show a significant breakout from the support area between $ 11,100 and $ 11,300 and the blue boxes indicate that the support has been tested multiple times.
The more a support level is tested, the weaker it gets And after the $ 11,400 rejection on September 2nd, retesting the support zone at $ 11,100 could guarantee support.
The failure caused the price to fall towards the lower support zones which are between $ 10,400 and $ 10,600. Given the importance of the decline and its accelerating pace, a rebound from the recovery is one of the near-term options.
The bullish scenario for Bitcoin
4-hour chart of the bullish scenario for Bitcoin. Source: TradingView
Unfortunately, at the moment there isn’t much optimism that we can see on the chart. First, Given the uptrend, support should be established between $ 10,400 and $ 10,600.
If support can be established in this area, there may be a short-term jump into the zone between $ 11,200 and $ 11,300. This is also immediately the crucial point at which we can appreciate additional optimism.
A breakout in this resistance zone is unlikely to be expected in a single attempt. since the price has been held at this level for several weeks.
So, We could expect a rejection between $ 11,200 and $ 11,300 and a retest of $ 10,400 or $ 10,600. In this case, it is important to consider what the key rebound points are.
After these raised floor tests Any interruption between $ 11,200 and $ 11,300 would guarantee the chances of retesting the $ 12,000 level.
Loss of support at $ 10,400 and $ 10,600 would invalidate this bullish scenario and ensure further bearish momentum.
The bearish scenario for Bitcoin
4-hour chart of Bitcoin’s bearish scenario. Source: TradingView
The bearish scenario is relatively the same. The difference, however, would be the failure to maintain the level of support.
When the price of Bitcoin fails to hit the range between $ 11,200 and $ 11,300 and spins around $ 10,900, A greater decline is imminent.
In this case, we can expect a breakout of the support area between $ 10,400 and $ 10,600. When the support area collapses, a deeper immersion towards the zone is between $ 9,600 and $ 9,900 in the wild.
The $ 9,600 and $ 9,900 could provide a zone for a massive rally as there is an open CME void in this region as well. Given that 90% of the CME gaps are filled, it doesn’t seem crazy to expect this CME gap to close very soon.
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement carries risks. You must do your own research when making a decision.