Mind the gap: Bitcoin price charts now hint at drop below $10K
The fact that Bitcoin (BTC) price was unable to break through the resistance level at $12,000 meant a retracement was imminent.
However, the fast pace of the current retrace was not expected by the markets and has surprised a lot of traders. The crucial support zone of $11,100 failed to provide support and led to the current tumble towards the $10,500 region.
The Bitcoin daily chart is showing a clear rejection of the $12,000 zone, after which a sharp drop occurred. Such a drop wasn’t unexpected, given the rejection of $12,000. However, a closer look will determine whether the fast-paced drop towards the $10,500 was a likely outcome.
The lower time frames are showing a clear break of the $11,100-$11,300 support area and the blue boxes show that the support has been tested several times.
The more a support level is tested, the weaker it becomes and after the rejection of $11,400 on Sep. 2, a renewed test of the support zone at $11,100 could warrant support.
This failure caused the prices to drop towards the lower support zones, which can be found at $10,400-10,600. Given the significance of the drop and the fast pace, a short term relief bounce is on the tables.
The bearish scenario is relatively the same. However, the clear difference is a failure of the support to sustain support.
If the price of Bitcoin can’t reach the $11,200-$11,300 area and rejects at $10,900 already, further downwards momentum is imminent.
In that case, it’s very likely to expect a breakdown of the $10,400-$10,600 support area. If the support area breaks down, a further correction towards $9,600-$9,900 is on the tables.
The $9,600-$9,900 is a massive pivot, as there’s also an open CME gap in that region. As 90% of the CME gaps close, it’s not unlikely to expect a close of this CME gap shortly.
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