On August 11 the price of gold and silver showed some corrective movements, the same was seen in the cryptomarket. Bitcoin (BTC) dropped by $700 from $11,800 to $11,100 in one day, marking a short term correction.
However, is the overall bullish momentum gone from the crypto markets? Given the strong surges from Chainlink (LINK) and Tezos (XTZ) today, it seems that the bull market is still on fire.
Crypto market daily performance. Source: Coin360
Bitcoin holds crucial support at $11,200
If Bitcoin wants to sustain bullish momentum, the crucial support is between $11,100-11,300 as shown in the following chart.
BTC/USD 1-day chart. Source: TradingView
The daily chart shows a crucial support level in the green box. As long as that level sustains support, further momentum is likely to expect.
However, once the price of Bitcoin loses the support level at $11,100-$11,300, expectations are that the price makes a significant drop towards the $10,000 area. The next massive support zones are found at $9,700-$10,000, which is similar to the CME gap.
BTC CME 1-day chart. Source: TradingView
Open gaps are quite frequently tested and closed before the market continues to rally upwards. In this case, the price accelerated in the weekend, through which a CME gap is left open between $9,650-$9,900.
If the price of Bitcoin drops below $11,200, it’s likely to expect that the price will continue to fall towards these regions as multiple arguments are lining up. Not only are horizontal support levels found in this area, but the 100-day and 200-day moving averages are also approaching these zones to consistently provide support.
What are the short term levels to watch for Bitcoin?
BTC/USDT 4-hour chart. Source: TradingView
The short term levels to watch are defined in the chart. On the upside, the clear resistance levels are structured at $11,700-$11,800 and $11,950-$12,050.
In the short term, the trend has switched as the price is making lower highs. Lower highs frequently indicate further downwards momentum, through which breaking those resistance levels are crucial if the price of Bitcoin wants to continue moving towards $15,000.
However, it’s also crucial to sustain support at the $11,100-$11,250 level. If that level doesn’t support the next test, a likely drop towards the $10,800 or $10,000 levels is expected.
The bullish scenario for Bitcoin
BTC/USDT 4-hour bullish scenario chart. Source: TradingView
The bullish scenario is defined in a straightforward manner. First of all, a rejection at the $11,700 level is likely to be expected, after which a test of $11,400 should provide support.
If this scenario plays out, a likely break above $12,000 is on the tables. What are the targets for Bitcoin after this level?
Most likely $15,000 as the area between $11,800-$12,000 is the last massive resistance level before the bull market really heats up.
The bearish scenario for Bitcoin
BTC/USDT 2-hour bearish scenario chart. Source: TradingView
The bearish scenario is surrounded by the same crucial levels, as a rejection at $11,700 could lead to a substantial drop.
However, in the bearish scenario, the $11,400 level doesn’t provide support. Through such a drop, the $11,200 level could be tested another time, and the more often a level gets tested, the weaker it becomes.
If the $11,200 doesn’t provide support in the next test, a drop towards $10,000 is on the tables.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.