With the price of Bitcoin (BTC) unable to cross the $ 12,000 resistance level, a pullback came as no surprise. In the last days The BTC / USD pair fell to $ 11,400, a correction of almost 10%.
Snapshot of the daily performance of the cryptocurrency market. Source: Coin360
Meanwhile, gold, silver and other commodities are also correcting themselves due to a slight recovery in the DXY or the US dollar currency index.
In addition, various high-performance engines such as Chainlink (LINK) and Tezos (XTZ) showed significant corrections in the past few days. Can this be a time to buy fall or are there more revisions coming up? Let’s analyze the charts.
Bitcoin was declined at $ 11,800 after it got back within reach
Bitcoin price failed to force a breakout above the USD 12,000 resistance level, causing it to fall into the range.
BTC / USDT 4-hour chart. Source: TradingView
As discussed in the previous article, the $ 12,000 area was critical to maintaining further upward momentum. That support has not been sustained, which means withdrawal is likely.
Immediately after the break below USD 12,000, the price of Bitcoin fell towards the support area to USD 11,600. That $ 11,600 level resulted in a slight rebound towards $ 11,800. As the graph shows, the USD 11,800 area has been confirmed as the new resistance level.
Such a change in support / resistance usually means more downward movement as buyers are not strong enough to push the price above that resistance level. Given the weakness of such a move, further levels of support can be tested below.
In fact, it did as BTC fell towards the next level of support, the green zone, and the final crucial hurdle before a potentially rapid decline to $ 10,000.
This important level of support should include
1-day chart of the BTC / USDT pair. Source: TradingView
A bearish divergence requires a possible trend reversal. However, This is not a confirmed bearish divergence unless the market begins to hit new lows in the daily time frame.
With the recent low at $ 11,200-11,300, the market needs to stay above the green zone and the recent low to have the possibility of another uptrend in the short term.
If the price of Bitcoin falls below the green zone, the next support zone will be at $ 9,600-10,000 and the bulls on the horizon will be in more pain.
1-day chart of the BTC / USD pair. Source: TradingView
Several examples of invalidated bearish deviations have been noted in recent years. One of them is shown in the graphic (April 2019) and looks like the current price movement.
Possible bearish deviations could also be seen here in the charts. However, It has never been confirmed as its latest low was held as a support. With the structure remaining intact (higher lows, higher highs), the market continued to rally as Bitcoin rose to $ 13,000.
The bottom line is that the current price move reminds me a lot of the price move the market saw in April 2019, and history could repeat itself as long as it’s between $ 11,200 and $ 11,400.
The bullish scenario for Bitcoin
BTC / USDT bullish scenario chart. Source: TradingView
The bullish scenario depends on the support level from $ 11,200 to $ 11,400 as mentioned above.
As long as this area offers support and Bitcoin regains the USD 11,800 area as support rather than resistance, further uptrend should be expected.
Additional targets for Bitcoin would be $ 13,000. However, the main resistance range after $ 12,000 is between $ 15,500 and $ 17,000. In other words, when $ 12,000 finally gives way, the market will become even more bullish than before.
The bearish scenario for Bitcoin
BTC / USDT 12-hour bear scenario chart. Source: TradingView
Likewise, the $ 11,200-11,400 level of support is also vital for bears. If this level is lost over the next week, further downside momentum is likely, particularly towards the open gap in Bitcoin CME futures at $ 9.7000, which is also a significant level of support.
However, Before that happens, a possible retest of the $ 11,800-12,000 should come as no surprise. With that in mind, there are two critical zones for bulls and bears.
The bulls should be in the $ 11,200-11,400 range, after which the price of Bitcoin should be above $ 11,800-12,000.
For the bass players $ 11,800- $ 12,000 should be considered resistance and $ 11,200–11,400 should fail as a support level.
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.