Bitcoin price drop below key support may trigger CME gap fill at $9.7K

Bitcoin price drop below key support may trigger CME gap fill at $9.7K

The price of (BTC) abruptly fell from $11,823 to $11,102 in the last 48 hours. While on a macro level the digital asset remains in an uptrend, there appear to be three key factors behind the pullback.

The presence of a crucial resistance level at $12,000, several whales taking profit, and a retest of a major support area likely catalyzed the drop.

Since the first week of August, Bitcoin has attempted to breach the $11,800 to $12,500 resistance range. Every one of the five attempts to surge past $12,500, $12,000 and $11,800 levels has resulted in steep rejections.

One potential reason the $12,000 level has served as a difficult resistance area for buyers is that it has been a historically relevant resistance area. After February 2018 and July 2019, this is the third time in two years that BTC has tested this resistance zone.

READ  Scalability Enhancements Kept Bitcoin Decentralized: BitMex Research

A pseudonymous trader known as “DonAlt” said while Bitcoin could rebound, bears have an easier invalidation than before. He said:

Ever since the price of Bitcoin surpassed $10,000 on July 26, it has remained above the $10,000 to $10,500 support range.

Given that the $10,000 level has become a significant support level for Bitcoin, the possibility of a major support retest exists. On-chain analyst Willy Woo also pointed out that a drop below $10,900 could lead to a CME gap fill, which is present at $9,700.

As Cointelegraph previously reported, a Bitcoin whale who purchased 9,000 BTC in early 2018 recently took profit around the $12K level. At the current price of around $11,300, 9,000 BTC is worth nearly $101.7 million.

Some whales appear to be taking profit because the $11,500 to $12,000 range is where many are either at breakeven or in profit. On Aug. 16 analyst David Puell said:

READ  Cryptocurrency Wallets MyCrypto and Ambo Add Multiple New Features

“Finally, unspent whale clusters confirm a great battle taking place. Two actors at play: top buyers at 12k-14k reaching their breakeven price, and current buyers active after the first higher high in over a year. If we get a correction, it will most likely result in another major cluster of re-accumulation at the 10k area (as expected from the volume profile before); if we breakout, well… enjoy the ride.”

Therefore, it seems reasonable to conclude that today’s mild correction was the result of Bitcoin’s steep rejection at a key resistance range, some whales taking profit, and the presence of a major CME gap at $9,700.

Leave a Reply

Your email address will not be published. Required fields are marked *

Want to automate your crypto Trading?
Try this new trading Robot!

Your information will be validated and you will be automatically redirected to the trading robot advanced dashboard.