Bitcoin price charts point to a double-decker and a relief rebound to $10,800
Last weekend was incredibly hard for most investors in crypto currencies, as there were massive sales. The price of Bitcoin (BTC) fell below USD 10,000 several times, but seems to have found short term support at this level.
The main question for the markets is whether a relief rally is just around the corner or more downward movement is expected.
Let’s take a look at the charts to determine what could happen next.
Crypto market daily performance snapshot
3 reasons why the price of Bitcoin suddenly dropped from USD 10,000 today… and recovered
Bitcoin holds on to USD 10,000 as a level of psychological support
BTC/USDT 1-day chart
The psychological barrier of USD 10,000 is currently acting as a support, indicating that a short-term relief rebound may be on the horizon. A clear break of the USD 11,200 area triggered a massive sell-off in all markets.
This drop led to primary support levels around the WEC gap, where USD 10,000 is a significant support level, as well as USD 9,600.
As recent market movements were volatile, multiple CME gaps can be seen on the daily chart.
The daily chart of WEC futures in Bitcoin now shows two WEC gaps. The obvious one, between USD 9,650 – USD 9,950, is still unfilled.
However, since the markets have been volatile over the weekend, a new WEC gap was created above the current price. This costs between USD 10,450 and USD 10,600 and will probably also be filled in the short term.
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These Bitcoin futures gaps are significant because most traders look at them as an indicator. Since many traders look at these levels, these gaps tend to get filled most of the time.
As such, they’re an additional tool for defining support and resistance levels, although they shouldn’t be used as the only factor when trading.
A possible trend reversal is on the horizon, although the BTC/USD still appears to be on shaky ground. The blue box indicates a new lower minimum, which was necessary to confirm an Immediate Edge upward divergence.
However, the market has not shown massive strength since the rebound from less than USD 10,000, reaching only USD 10,300. This rebound returned to the support region (around the green box), where a higher potential minimum can now be established.
The next step for a possible reversal would be a new peak above USD 10,300, which will be described in more detail in the next section.