With the price of Bitcoin (BTC) unable to cross the $ 12,000 resistance level, the rebound was not surprising. In the past few days, BTC / USD has dropped to $ 11,400, a correction of almost 10%.
Meanwhile, gold, silver and other commodities are also correcting themselves due to a slight recovery in the DXY or the US dollar index.
Additionally, some heavy duty engines like Chainlink (LINK) and Tezos (XTZ) have shown significant fixes in the past few days. Could this be a moment to buy the dip or are there any more reviews coming? Let’s examine the graphs.
It rejected Bitcoin at $ 11,800 after it broke in the range
Bitcoin price failed to force a breakout above the USD 12,000 resistance level and pushed back into the range.
As discussed in the previous article, the $ 12,000 area was critical to maintaining additional upward momentum. He’s been unable to maintain that support, which means a decline is likely.
Immediately after falling below $ 12,000, Bitcoin fell towards its support zone at $ 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 support / resistance reversal generally means more downside as buyers are not strong enough to push the price above this resistance level. Due to the weakness of this step, further levels of support below that can be tested.
It actually happened when Bitcoin then slumped towards its next level of support, the green zone and the final critical hurdle, before a possible swift drop to $ 10,000.
A bearish divergence requires a possible trend reversal. However, it is not a confirmed bearish divergence unless the market begins to record new lows in the daily timeframe.
With the recent drop of $ 11,200 to $ 11,300, the market needs to stay above the green and recent lows to have further upside in the short term.
If Bitcoin price drops below the green, the next support zone is at $ 9,600-10,000 and more pain is on the horizon for the bulls.
There are many examples of bearish bearish disparities in the past few years. One of them is shown in the graphic (April 2019) and is similar to the current price movement.
A possible bearish divergence can also be seen here in the charts. However, it hasn’t been confirmed as the final drop as support. Given the unchanged structure (higher lows, higher highs), the market continued to rebound as Bitcoin rose to $ 13,000.
The overall conclusion is that the current price movement reminds me a lot of the price movement the market experienced in April 2019 and that the date can be repeated as long as there is $ 11200 to $ 11400 left.
Bullish scenario for Bitcoin
The bullish scenario depends on the support level of $ 11200 to $ 11400 as mentioned earlier.
As long as this area maintains support and Bitcoin regains the USD 11,800 area as support rather than resistance, another uptrend should be expected.
Other bitcoin targets can then be found at $ 13,000. However, the main resistance area after $ 12,000 is between $ 15,500 and $ 17,000. In other words, when you finally enter $ 12,000, the market becomes even more bullish than it was before.
Downward scenario for Bitcoin
Similarly, the USD 11200 to 11400 support level is important for bears. If this level is lost in the next week, there will likely be more downside momentum, particularly towards the CME Bitcoin’s open futures gap at USD 9,7000, which is also an important level of support.
Before that happens, however, a potential retest of $ 11,800 to $ 12,000 should come as no surprise. There are two important areas for bulls and bears in this regard.
For bulls, it should hold the $ 11,200-11,400 range, after which the Bitcoin price should break through $ 11,800-12,000.
For bears, the $ 11,800-12,000 area should remain resistance and the $ 11200-11400 area should fail support.