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Bitcoin price could hit the $ 11,000 level after the Dollar Force Index rises

September 24, 2020

The price of Bitcoin (BTC) has stagnated in the past few weeks. as it has not been able to exceed $ 11,000 nor fall below $ 10,000, the last character of a continuous area structure.

Such a limited and lateral division structure could relieve the markets somewhat, such as Altcoins, especially the DeFi sector, They’ve seen massive sales in the past few weeks.

However, what’s next for Bitcoin as the futures expiration day is tomorrow, which is likely to result in short-term volatility?

Bitcoin is still waiting to close the CME gap while the downtrend continues

Bitcoin price could hit the $ 11,000 level after the Dollar Force Index rises
Bitcoin price could hit the $ 11,000 level after the Dollar Force Index rises

BTC / USD 1-day chart

Daily chart of the BTC / USD pair. Source: TradingView

The daily chart shows a significant downtrend from USD 12,400. The $ 12,000 trap marked the end of an uptrend with a clear rejection of the $ 12,000 level as confirmation.

As the graph shows, declining highs are consistently made, initiating bearish mode price from that high. Initially, the resistance at the USD 12,000 level was confirmed and thereafter the USD 11,100 area turned from support to resistance.

Since the current trend is bearish, Another bearish drop after $ 10,000 should result in another drop. The next level of support could be the CME gap at USD 9,600, which has yet to be closed.

BTC / USD CME 1-day chart

CME BTC / USD daily chart. Source: TradingView

The CME chart shows the gap that has not yet been filled. Since most of the CME gaps have been closed, this gap can also be expected to close in the future.

Will the US Dollar Currency Index Consolidate Now?

DXY Index 1-Day Chart

Daily chart of the DXY index. Source: TradingView

The main cause of the wealth weakness is the stronger US dollar. Globally, concerns and fears about another round of lockdowns due to the coronavirus caused markets to retreat.

The commodity, cryptocurrency, and equity markets have shown weakness over the past few weeksand investors are fleeing to “safe havens” like the US dollar.

However, as the USD struggles against a potential level of resistance, a correction is expected now. Bitcoin and other assets could see a relief rally if the USD corrects.

Possible scenario for Bitcoin

BTC / USD 1-day chart

Daily chart for the BTC / USD pair. Source: TradingView

Given that the price of Bitcoin is now at support levels and the US dollar may break out, a relief rally is to be expected. However, One bearish factor is the recent negative market sentimentThis is a strong argument against a short-term relief rally.

However, The critical level to break higher is the resistance zone around USD 11,000that probably won’t break all at once. Bitcoin price has turned into a downtrend of $ 12,400 in which a clear basic structure needs to be defined before further upward momentum can be expected.

Either way, a rally towards $ 10,700 to $ 11,000 is on the table, as the 2-hour graph shows.

BTC / USD 2 hour chart

2-hour chart of the BTC / USD pair. Source: TradingView

Also, The graph shows a possible bullish divergence. This bullish divergence will be confirmed once Bitcoin price hits a higher low of $ 10,350-10,400. If that happens A possible easing of the rally into the upper resistance areas is likely.

However, this relief rally cannot be confirmed as a possible basic structure in the markets in general. After a large impulsive move, it takes a long time for consolidation and accumulation to begin before a new impulsive move can begin.

Like the last one in August ($ 10,000-12,400), It is likely that several months of lateral consolidation are expected before new fireworks appear.

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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