With Bitcoin (BTC) price showing weakness last week, the main support area remains held around $ 11,200. With Powell’s speech in Jackson Hole and the expiration of futures and options over the past few days, several arguments were made for volatility during the week.
Most importantly, the critical support level at $ 11,200 has not been breached, meaning that focus is now shifting back to the $ 12,000 resistance level.
The critical support area remains as the uptrend remains intact
The critical support zone held up again, as shown on the daily bitcoin price chart.
The daily chart shows a clear resistance zone between $ 11,800 and $ 12,000, and a support area 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 drop off that range would definitely guarantee a significant downside. This is because, given the previous near-vertical rally, few areas of support will be found between $ 10,100 and $ 11,000.
If the bitcoin price falls below the green, a sharp drop to $ 10100-10300 should not be surprising. In addition, the entire uptrend and the sectoral structure will be lost, which could potentially mean a sharp decline.
However, with the support level rising again, the next step for Bitcoin would be to break above $ 11,800-12,000 to reach a new high.
The 2 hour chart of Bitcoin shows a support zone between $ 11100 and $ 11,250, which was confirmed when Bitcoin’s price had not actually fallen below this level over a higher period of time.
The initial bounce pushed the price towards $ 11,500, which was clearly rejected as BTC fell into its support zone. Once again paused, creating a double floor pattern indicating a potential short term trend reversal.
However, the top of the chart shows that the $ 11,650 area is a strong resistance area. If it does break down, further momentum towards $ 12,000 is expected.
The bullish scenario is clear and direct after maintaining the level of $ 11100 – $ 11200 as support from forming a double bottom.
The near-term resistance level was hit again on August 26, causing it to drop slightly from $ 11,500 to $ 11,200. However, a new high is required to reverse the short term trend. This higher high is reached when price held $ 11,300 as support and broke $ 11,700.
In this case, the bitcoin price makes new highs, higher and lower lows, which classify as an uptrend. A clear breakout into that resistance zone would put $ 12,000 into the crossfire.
Bearish scenario for Bitcoin
The bearish scenario is the opposite. Since the fake break above $ 12,000, momentum has continued to wane, which could cause the Bitcoin price to drop further.
However, with the weakening of the US dollar, it becomes increasingly unlikely that a downward momentum for Bitcoin will occur. However, if BTC price wants more downward movement, it should be rejected at $ 11,600.
If this happens and a new lower low occurs (drop below the previous low at $ 11,100), then it’s likely that there is a bigger downtrend. In this scenario, a rejection of $ 11,300 would confirm such a scenario.
If $ 11,000 is lost, the potential support level is between $ 10100 and $ 10.400 and $ 9600 to $ 9,800, with the CME futures gap remaining.