The price of Bitcoin would now face 2 main scenarios: 16 thousand or 9.6 thousand dollars, here’s why
The Bitcoin price (BTC) has declined by more than 6% in the last three days and with the expiration of the Bitcoin CME futures of $276 million approaching on August 28, traders are nervous that there may be an additional downside within the possible scenarios.
After Bitcoin’s rejection at $12,500, traders anticipate two key scenarios to unfold in the short term.
Some technical analysts believe that Bitcoin is targeting USD 16,000 or USD 9,600 first, but the short term outcome remains uncertain, as it depends on reaching certain levels of resistance and support.
A myth? Let’s see why the expiration of Bitcoin’s CME futures is irrelevant
Traders expect BTC to reach USD 16,000 or USD 9,600
According to the pseudonymous Byzantine General trader, Bitcoin (BTC) could go up to USD 16,000 or down to USD 9,600.
If the BTC weekly chart closes above USD 11,500, the trader said that the chances of BTC recovering to USD 16,000 increase. If the price stays below USD 10,500, the trader said that USD 9,600 is the software. He wrote:
“Let’s keep things simple. 11,500 key level. If you close weekly above -> 16,000. If you close below -> 10,500 ‘obvious support’. Because the obvious 10,500 might not do anything like 6,000 in ’19. 9,600 is the next strong support (CME)”.
Another compelling reason why traders might expect a brief setback in the area of USD 9,600 to USD 9,700 is due to a WEC gap. These gaps form on the chart of the Bitcoin CME futures market because the regulated market closes over the weekend.
A CME gap usually closes in a short period of time, and this increases the chances of a reversal. There is also a small WEC gap of USD 16,000, but only on a lower time frame chart where the gap has existed for years.
Bitcoin price reaches USD 11,600 when the Fed announces that it will let inflation exceed 2%
In the short term, another cryptomoney analyst named Mayne said that Bitcoin’s bulls would need to claim the USD 11,700. Failure to recover this higher resistance level could result in an extended consolidation phase. The analyst noted:
“This is what you don’t want to see as a bull, the price with a false high breakout and now a step down. The last 2 upward movements seem clear new downward evidence. If it is a distribution, he expects the sale to accelerate soon. The bullish side needs to go in and retrieve USD 11,700.
Selling news stock amplified the fall
Earlier today, the price of Bitcoin rose briefly to USD 11,600 after Federal Reserve Chairman Jerome Powell’s speech on inflation. During the preparation of the speech, many investors expected that gold and Bitcoin would benefit from Powell’s speech on controlling the inflation rate.
The Fed Chairman’s Speech Will Not Affect Bitcoin’s Price
But shortly after the speech ended, the price of BTC immediately dropped from USD 11,600, falling to just USD 11,125 in Coinbase. As Cointelegraph reported, it could have been the confluence of market prices at the Jackson Hole symposium and the lower-than-expected rate of inflation.
The drop in news sales in the Bitcoin and gold markets further intensified the downward trend, causing Bitcoin to fall back to early August levels.
The sharp drop in the Crypto Cash price over the last three days also broke the structure of the short-term bull market, cancelling out the higher and lower patterns.
It remains to be seen whether the alteration of this trend will lead BTC to the bearish scenario of a price range revision from USD 9,600 to USD 10,500.