Like the price of Bitcoin (BTC) It showed weakness in the critical USD 11,200 support zone for the past week but continued. Various arguments for volatility were made during the week with Powell’s speech in Jackson Hole and the expiration of futures and options, both events occurring in the last few days of the month.
But what is more important The critical support level at USD 11,200 was not exceeded, meaning that focus is now returning to the resistance level at USD 12,000.
Daily performance of the cryptocurrency market. Source: Coin360
The critical support zone remains while the uptrend remains intact
The crucial support area has held up again as shown by Bitcoin’s daily price chart.
One day chart for the BTC / USD pair. Source: TradingView
The daily chart shows a clear resistance zone between $ 11,800 and $ 12,000 and the support zone between $ 11,100 and $ 11,300. This level was previously confirmed as support.
The range between $ 11,100 and $ 11,300 had to be held again as a decline below that would warrant a large correction. This is because given the near-vertical run at the top, there are few support zones between $ 10,100 and $ 11,000.
If the price of Bitcoin falls below the green zone, a sharp drop to levels between $ 10,100 and $ 10,300 would not be a surprise. In addition, the entire uptrend as well as the limited range structure would be lost, which would likely mean a larger decline.
But since the support level has held again, The next step for Bitcoin would be to pause above the zone between $ 11,800 and $ 12,000 to hit new highs at higher levels.
Double bottoming suggests a short-term trend reversal
2-hour chart for the BTC / USD pair. Source: TradingView
Bitcoin’s 2-hour chart shows a support zone between $ 11,100 and $ 11,250. This was confirmed when the price of Bitcoin did not drop below this level for an extended period of time.
The initial rebound pushed the price towards $ 11,500, which was clearly rejected when the price of BTC fell back to the support zone. Once again, a raised floor pattern was retained and created, indicating a possible short-term trend reversal.
However, The upper side of the chart shows that the USD 11,650 area is a firm resistance zone. If it collapses, further momentum is expected towards $ 12,000
The bullish scenario for Bitcoin
2-hour chart of the bullish scenario for the BTC / USD pair. Source: TradingView
The bullish scenario is simple with the USD 11,100-11,200 levels held as support. through a double-decker formation.
The near-term resistance level was hit again on Aug 26, causing a small drop from $ 11,500 to $ 11,200. However, a new higher high is required for a short-term trend reversal. A new higher high will be set if the price holds $ 11,300 as support and breaks above $ 11,700.
If that happens Bitcoin price will see new higher highs and lows. This is classified as an upward trend. An obvious break in this resistance zone would put $ 12,000 in between.
The bearish scenario for Bitcoin
2-hour chart of the bearish scenario for the BTC / USD pair. Source: TradingView
The bearish scenario is the opposite. Since the false break above $ 12,000, momentum has remained on the downside. This can cause the price of Bitcoin to drop even further.
However, With the US dollar weakening, Bitcoin is unlikely to continue its downward momentum. However, if BTC price wants more cons, it would have to lower the $ 11,600.
If this happens and a new lower low occurs (a fall below the previous low of $ 11,100) a stronger pullback is possible. With that in mind, such a scenario would confirm such a scenario if the price turns down $ 11,300.
If $ 11,000 is lost, the potential support level is between $ 10,100 – $ 10,400 and $ 9,600 – $ 9,800 with the CME futures gap remaining.
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