A Rejection At This Level Could Result in Bitcoin Falling to $8,000
While this is positive for the cryptocurrency in the short term, analysts are still fearful that Bitcoin is subject to a steep retracement.
One analyst commented that BTC breaking below $10,600 on a weekly time frame could trigger one such retracement. $10,600 is important to Bitcoin as prices in that general vicinity have marked three previous tops to medium-term rallies.
Bitcoin Needs to Hold $10,600 Moving Forward
Bitcoin must hold the $10,600 support on a weekly time frame or risk a retracement under $10,000, then towards $8,000 according to a cryptocurrency trader.
The individual shared the chart seen below on September 18th, which shows that Bitcoin should maintain the support of $10,600 moving forward to maintain its bullish bias:
“No matter how good (or bad) the low timeframes look, the $10.6k area is still one of the most important areas on the chart. This week closes below it? I’ll assume top is in and we’ll trade towards $8k. We close above it? I’ll close shorts and see what happens next.”
May Be Tough to Hold
On a shorter-term time frame, the same trader is also bearish, pointing to clear technical pressure around the $11,000 range.
He wrote on recent price action:
“Closed the rest of my adds for an avg. gain of $150, I wanted to see a strong breakdown, doesn’t look like I’m going to get it and I’ll be out tonight, so can’t monitor. Looks like there will either be better opportunities later or safer opportunities lower down.”
Othres have also noted that theres’ a good likelihood that Bitcoin tops in the current range due to it acting as a point of historical support in August.
For instance, the number of corrections that took place throughout August all ended in the $11,000-11,300 band. Bitcoin failing to reclaim that level may confirm expectations of a bearish retracement back towards range lows at $10,000.