Bitcoin starts an important macro week in a weak position, and the BTC movement in 2023 is starting to resemble a “double top” formation on the chart. After a disappointing close below $26,000 for the week, the BTC/USD pair is struggling to find a bid in the midst of low volatility.
How Did the Weekly Close Affect the BTC Price?
Analysts who are currently making downward predictions continue to anticipate low levels for the price of Bitcoin, and liquidity conditions increasingly support their arguments. A recovery to fair value may also come through the relative strength index (RSI) in Bitcoin, as it has almost completely lost its gains from the beginning of the year to reach its lowest levels since the first week of January.
It was already expected that Bitcoin would close the week below significant trend lines, but the reality could be worse than many would like to admit. Popular investor and analyst Rekt Capital warned that a close below $26,000 would “probably” confirm the double top formation on the BTC weekly chart. According to data from TradingView, this formation currently takes the shape of two local peaks in 2023, both of which are above $31,000 and have a pullback to $26,000.
In a post, Rekt Capital wrote that a weekly close below $26,000 would likely confirm the Double Top formation. Other analyses pointed out that $26,000 has been a key support level for three weeks, and determining its fate is crucial on a weekly time frame. Despite this, the BTC/USD pair saw its lowest weekly close since March, but popular chartist JT told X followers that there is still room for optimism. He argued that this optimism is in the form of the 200-week exponential moving average (EMA) near $25,600:
“What’s quite remarkable is that the past three weekly closes have been within $400 of each other! We’re talking about boring and flat price action! The good news is that we closed well above the weekly 200 EMA level of $25,600.”
Could a $20,000 Gap be Next?
Bitcoin’s gradual decline has sparked a debate about its ability to repeat classic chart behavior. This debate focuses on the cryptocurrency’s tendency to “fill gaps” in CME futures markets that occur over weekends and holidays.
The price difference between the close of one week and the opening of the next often acts as a magnet for future BTC price movements, but not always immediately. The BTC/USD pair usually fills gaps within days or even hours after the resumption of futures markets, but some gaps are left behind over time. Currently, a significant gap is hidden around $20,000.
Rekt Capital stated in a recent YouTube update on September 6th that the only real CME gap we have for downward movement from current price levels is this. After serving as support and resistance at various points since its creation filled a gap in June 2022, it is now acting as resistance and will further fuel the return to the $20,000 region that completes the aforementioned double top. Under these conditions, a potential range for BTC price will form, and the $20,000 gap and previously filled gap will function as support and resistance, respectively.
Referring to another unfilled gap that is currently below $10,000, Titan uploaded a chart consisting of historical gaps:
“Some of you who have been in crypto for a while may remember the $9,600 gap in September 2020. Back then, everyone was waiting for this gap to be filled so they could finally buy Bitcoin again. Guess what happened? This gap has not been filled to this day, and many people went crazy with FOMO as it surpassed $20,000. There is still an unfilled gap between $20,000 and $21,000. Will it be filled? Anything is possible. But until the market structure is broken, this is just speculation.”
