Bitcoin now faces 2 main scenarios: $16K or $9.6K

The price of Bitcoin (BTC) has declined by more than 6% in the last three days and with the $276 million CME Bitcoin futures expiry approaching on Aug. 28, traders are nervous that additional downside could be in store.

Following Bitcoin’s rejection at $12,500, traders foresee two key scenarios playing out over the short term. Some technical analysts believe that Bitcoin is headed to either $16,000 or $9,600 first but the near-term outcome remains uncertain as it’s dependent on certain resistance and support levels being hit.

According to the pseudonymous trader Byzantine General, Bitcoin (BTC) could rise to either $16,000 or drop to $9,600. If BTC’s weekly chart closes above $11,500, the trader said the chances of BTC rallying to $16,000 increase. If the price remains below $10,500, the trader said $9,600 is the logical support.

Another compelling reason traders might expect a brief pullback to the $9,600 to $9,700 area is due to a CME gap. These gaps form on the CME Bitcoin futures market’s chart because the regulated market closes during the weekend.

A CME gap typically is closed within a short period of time, and this raises the chances of a pullback. There is also a small CME gap at $16,000, but only on a lower time frame chart where the gap has existed for years.

The sharp drop in BTC price over the past three days also broke the short-term bullish market structure, canceling out the higher low and higher high patterns. Whether the altering of this trend will sway BTC into the bearish scenario of a revisit to the $9,600 to $10,500 price range remains to be seen.

Traders say Bitcoin now faces 2 main scenarios: $16K or $9.6K — Here’s why, CoinTelegraph, Aug 28