After retesting the range lows, Bitcoin (BTC) has closed the week above a key area, momentarily preventing a breakdown to lower levels. Some market watchers suggested that reclaiming the local range highs this week will set the stage for another leg up, but an analyst warned of potential volatility in the coming days.
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Bitcoin Holds Crucial Weekly Support
As the market moves sideways, Bitcoin has continued to trade within its local range between the $108,250-$111,140 levels since the start of the month. The cryptocurrency has shown mixed signals since the second half of August, failing to hold the crucial $109,000 level during the previous week.
Analyst Rekt Capital asserted that BTC was showing “early signs of weakness,” and could see a bearish confirmation if it failed to hold this key level in the weekly timeframe.
However, the flagship crypto surged to the range’s high over the past few days and closed the week at around $111,137, averting the potential breakdown in the short-term timeframe.
“Bitcoin indeed didn’t fully confirm the breakdown; instead, price has reclaimed the $109k level as support and is now trying to rally higher in an effort to check if $114k has turned into new resistance after being lost as support a few weeks ago,” the analyst noted.
According to Rekt Capital, BTC’s retest of this level as resistance will be down to an inverse Head and Shoulders pattern forming on the daily timeframe, which has the $113,000 area as the pattern’s neckline.
A daily close above this level could set Bitcoin up for a potential post-breakout retest of this zone, fueling a rally toward the key weekly resistance level. Ali Martinez also affirmed that breaking pass $113,000 would set the cryptocurrency “on track for $116,000 and possibly $119,000.”
The New Key Pivot Point For BTC
Rekt Capital highlighted that a daily close above this level would “also confirm that the price is going to occupy the upper half of the Daily Bollinger Bands,” as the middle band sits around the $112,000 level.
“Turning the mid-point (orange) of the BBands into support tends to set price up for a move to the very top of the Upper Band, which happens to be around the $116k level,” he explained, noting that the upper band coincides with the Monthly Range High resistance level.
The market watcher detailed that BTC has been consolidating within the Macro Monthly Range at $107,200-$115,711, recently bouncing from the range lows. As a result, its price “is now ready to try and challenge the Range High over time.”
Bitcoin must close the week above $114,000 to retest the macro range high and build a base for a potential third Price Discovery Uptrend. “It’s all about $114k going forward as a key pivot point for price,” he concluded.
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Notably, BTC attempted to break out of a key area on Tuesday morning, hitting the $113,000 mark before retracing to $110,000. Nonetheless, Ted Pillows warned that the cryptocurrency could face some volatility in the coming days as US CPI data is coming on September 11.
He underscored that the last 3 CPI data resulted in a 9%-11% price drop for BTC, with August seeing the largest dip in the past few months. A similar correction could drive Bitcoin’s price to the $100,000 barrier, not seen since June.
As of this writing, BTC trades at $111,276, a 1% decline in the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
