As the Bitcoin price (BTC) showed weakness during the past week, around the crucial support zone of USD 11,200, however, it remained. Several arguments for volatility were made throughout the week with Powell’s speech in Jackson Hole and the expiration of futures and options, with both events occurring in the last days of the month.
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But more importantly, the crucial support level at USD 11,200 was not broken, which means that the focus now returns to the resistance level at USD 12,000.
The crucial support zone is maintained while the upward trend remains intact
The crucial support area has been maintained again as shown in the Bitcoin daily price chart.
The daily chart shows a clear resistance zone between USD 11,800 and USD 12,000, as well as the support zone between USD 11,100 and USD 11,300. This level has also been previously confirmed as support.
The area between USD 11,100 and USD 11,300 had to be maintained once more, as a fall below this level would guarantee a large correction. This is because, given the previous almost vertical run, there are few support areas between USD 10,100 and USD 11,000.
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If the price of Bitcoin falls below the green zone, a sharp drop to levels between USD 10,100 and USD 10,300 wouldn’t be a surprise. Furthermore, the entire upward trend would be lost, as well as the limited range structure, which would probably mean a more pronounced drop.
But since the support level has been maintained once again, the next step for Bitcoin Trader would be a break above the $11,800-$12,000 zone to reach a new peak at higher levels.
Double Bottom Formation Indicating a Short Term Trend Reversal
The 2-hour Bitcoin chart shows a support zone between USD 11,100 and USD 11,250, which was confirmed when the Bitcoin price didn’t actually fall below this level for a longer period of time.
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The first rebound pushed the price towards USD 11,500, which was clearly rejected when the BTC price fell back to the support zone. Once again, it held and created a double bottom pattern, indicating a possible short term trend reversal.
However, the upper side of the chart shows that the USD 11,650 area is a strong resistance zone. If it breaks, we expect to see further momentum towards the USD 12,000