Bitcoin

Bitcoin price charts point to a double low and a relief rally to $ 10,800

Last weekend was incredibly difficult for most crypto investors as there were massive sales.. Bitcoin (BTC) price fell below $ 10,000 several times, but appears to have found short-term support at that level.

The main question for markets is whether a relief rally is around the corner or another downtrend is expected.

Let’s look at the diagrams to see what might happen next.

Bitcoin price charts point to a double low and a relief rally to $ 10,800
Bitcoin price charts point to a double low and a relief rally to $ 10,800

Daily performance snapshot of the crypto market

Table of daily performance of the cryptocurrency market. Source: Coin360

Bitcoin is sticking to $ 10,000 as psychological support

BTC / USDT 1-day chart

1-day chart of the BTC / USDT pair. Source: TradingView

The $ 10,000 psychological barrier currently serves as a support. This suggests a near-term recovery may be on the horizon. A significant breakout of the $ 11,200 area triggered a sell-off in all markets.

This decline led to the primary support levels around the CME gap, where $ 10,000 is a significant support level, as well as to $ 9,600.

As recent market moves have been volatile, several CME gaps can be seen on the daily chart.

BTC / USD CME 1-day chart

1-day chart of the BTC / USD pair on CME. Source: TradingView

The daily chart of the CME Bitcoin futures now shows two CME gaps. The apparent value between $ 9,650 and $ 9,950 is not yet filled in.

However, As the markets were volatile over the weekend, a new CME gap was created above the current price. This costs between $ 10,450 and $ 10,600 and is expected to be completed in the short term.

These Bitcoin futures gaps are significant as most traders consider them an indicator. As many traders watch these levels, these gaps tend to fill in.

As such, they are an additional tool in defining support and resistance levels, although they should not be used as the only factor in trading.

Charts with lower timeframes show a double bottom

BTC / USDT 2-hour chart

BTC / USDT 2-hour chart. Source: TradingView

A possible trend reversal is on the horizon, although the BTC / USD pair still appears to be on shaky ground. The blue box indicates a new lower low that was required to confirm a bullish divergence.

However, The market has not shown massive strength since bouncing below $ 10,000 and only hit $ 10,300. This jump returned towards the support area (around the green box) where a potentially higher low can now be set.

The next step for a possible reversal would be a fresh spike above $ 10,300, detailed in the next section.

One possible scenario for the price of Bitcoin

BTC / USDT 2 hour scenario chart

BTC / USDT 2 hour scenario chart. Source: TradingView

A very likely scenario would be a short term relief rally. There are two possible cases in which this can occur.

The first can be seen on the map where the $ 10,000 area was supposed to serve as a support to form a floor structure.

The next step after holding the $ 10,000 range would be to test $ 10,600 and $ 10,800 – $ 11,000. However, An obvious breakout of $ 10,800 to $ 11,000 at once is highly unlikely on the first try. Crucial areas are seldom broken in one attempt. A rejection is therefore to be expected.

The second case in which a local lower bound is formed implies that the USD 10,000 level does not apply.

However, the price would fall to the $ 9,600 CME gap, the second tier of support. If the price of BTC jumps out of the $ 9,600 range and then receives $ 10,000 back, a scenario identical to the one above can be played.

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 involves risk. You should do your own research when making a decision.

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