This week’s market downturn has prompted Bitcoin (BTC), the leading cryptocurrency by market cap, to retest several crucial support levels. As the price begins to bounce back from recent lows, some analysts anticipate that the weekend may offer a bullish respite for investors.
Bitcoin Recovers From $78,000 Drop
Over the past week, Bitcoin has faced considerable selling pressure, raising concerns about a possible market top. The flagship cryptocurrency has fallen 21% from last week’s peak of $99,000, breaching the $80,000 mark for the first time since November.
This correction resulted in BTC plunging nearly 30% from its January all-time high (ATH) and trading below its price range set post-US elections. A week after the market downturn commenced, Bitcoin reached a new three-month low, testing the $78,000 support on Friday morning.
Various market observers noted that BTC’s latest drop has reached and partially filled its November 2024 CME Gap between $78,000 and $80,700. Rekt Capital highlighted that Bitcoin is currently experiencing a “strong rebound against the partially filled CME Gap, occurring with above-average seller volume.”
The leading cryptocurrency has surged approximately 7% from today’s lows, fluctuating within the $83,000 to $84,000 support range over the past few hours.
Analysts suggest that the CME Gap support and heightened sell-side volume will be crucial indicators to monitor over the weekend. Continuous, unrelenting sell-side pressure on BTC is deemed unsustainable, and seller exhaustion may accelerate in the coming days.
Bitcoin is finally starting to see above-average seller volume. There’s still potential for more seller volume to enter the market, but the likelihood of Seller Exhaustion occurring is increasing. This phenomenon usually precedes price reversals.
Is A Weekend Rebound Coming?
Crypto analyst Jelle observed that Bitcoin has made “three drives into deeply oversold territory” this week and is retesting the local lows before today’s dip, indicating that “weekend relief appears probable.”
The analyst emphasized that reclaiming the $84,500 support is essential for BTC’s recovery since “the previous two retests resulted in new lows.”
However, he noted that today’s rebound appears different as BTC has “touched the 200-ema cluster” for the first time this week and has broken above it. According to Jelle, this could indicate an “interesting weekend,” especially with the new CME Gap at $93,000 now open.
Rekt Capital also pointed out that Bitcoin “has filled every CME Gap that has emerged since mid-March 2024,” leaving only the newly formed CME Gap between $92,800 and $94,000 available after this retrace. If BTC continues this trend, we might see a price rebound aimed at filling the new gap soon.
The analyst outlined two potential scenarios regarding BTC’s current “downside deviation.” Bitcoin’s price could reach $93,500 by week’s end if the deviation “is to manifest as a downside wick.”
On the flip side, if the deviation is meant to represent the Post-Halving deviation with weekly candle closes beneath the re-accumulation range, BTC’s price could revisit the $93,500 level within the next two to three weeks as part of a “post-breakdown relief rally.”
At the time of writing, Bitcoin is trading at $85,120, reflecting a 0.5% increase within the daily timeframe.
