After hitting levels [$12,100] last seen a year ago, bitcoin witnessed a crash that dumped the price to $10,559. Not only did this cause liquidation of positions worth a billion-dollar but also reset market sentiment from extremely greedy to greedy.
Trading just above $11,000, there seems to be a visible fear among bulls as the price treads sideways. Disregarding the drop or the drop in volatility or the shorter time frames, it is time to take a look at the bigger picture.
Bitcoin weekly chart
Source: BTCUSD TradingView
The attached chart, although weekly, shows targets that are important on both the daily and the monthly time frames. Today’s crash was nowhere near 50 DMA [$9,545] or 200-DMA [$8,694]. However, 50-DMA is important since it is close to the CME gap, which might play a very important role in the potential drop that is yet to come.
Weekly & monthly targets
The weekly candle that will be closed in a few hours needs to close above $11,500 to assert bullish dominance. Failing to do so might just pave way for the bears to exhaust the bulls’ potential. The weekly resistance has been an important level after the 2017 bull run; this level resisted the price from heading higher.
Further, in Jun 2019, the euphoric and the sudden run-up from April was halted at this level. Another successful stop of the rally was in August 2019. Hence, this level will play an important role in deciding the direction of bitcoin’s price.
On an off chance, the price doesn’t close above $11,500, then $10,214 seems like a good support. Contrarily, if the price closes above $11,500 then monthly target 1 [$12,325] and monthly target 2 [$13,200] will soon be achieved.
CME gap is the talk of Twitter. All of the crypto twitter is on about how the gap between $9,925 to $9,665 is the only gap to have not filled. Hence, a drop down to this level is possible. While this proposition seemed to have faded away, it seems achievable now, thanks to today’s crash and the dilemma at the weekly close.
Owing to the potential weekly close below $11,500 would at least push the price to restest $10,100 and depending on the situation, it could head lower to $9,925 and even wick down to $9,665; quite similar to today’s wick down to $10,559.