Dip to $106,000 or Surge to New All-Time High?
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Bitcoin faces heightened volatility after a significant selloff prompted by President Donald Trump’s sudden announcement of a sweeping 50% tariff on all EU imports effective June 1. This unpredictable economic decision caused a ripple effect across markets, with Bitcoin dropping sharply from record highs near $111,800 to around $107,500 within hours.
Further Insights
Though there was a temporary rebound nearing $109,000, the subsequent market activity indicates a fierce contest between buyers and sellers. Technical analysis on the hourly chart highlights two possible outcomes for Bitcoin this week.
Bitcoin’s Compression Structure Amid Fair Value Gaps
As per analyst TehThomas, the present price structure of Bitcoin is characterized by two opposing hourly fair value gaps (FVGs). The lower FVG zone is recognized around $107,500, emerging during the climb towards $111,814 ATH and now serving as the first critical reaction point following the rally.
The upper FVG area spans from $109,800 to $110,700. This threshold, previously the foundation of a breakdown candle, transformed into a significant resistance level on Friday. Notably, a rejection was confirmed within this upper FVG, indicating a substantial presence of sellers.
The hourly chart provided by the analyst suggests a stalemate for Bitcoin’s price. A breach above or below the outlined fair value gaps is likely to determine the next significant move for Bitcoin.
The next decisive move for Bitcoin is expected to manifest with volume support, whether through a bullish breakout above resistance or a bearish rejection leading the price toward a lower demand target.
Chart from TradingView
Potential Bullish and Bearish Outcomes for Bitcoin
Interestingly, following the analysis, the recent price movements have reflected Bitcoin’s inability to reclaim the upper FVG while consolidating primarily around the lower FVG at $107,500. This makes this level crucial, as Bitcoin’s response here could lead to either an upward bounce or a notable price decline.
For the bullish case, a rebound at the lower FVG may propel Bitcoin towards the upper FVG. A sustained advance past the upper FVG at $110,700 would signal a bullish recovery, potentially revisiting previous all-time highs around $113,000.
Further Insights
Conversely, in a bearish scenario, especially with a definitive drop below the $107,500 mark, the path opens toward $106,000. This level corresponds to a liquidity reservoir established during consolidation earlier in the week. If the structure breaks down through $106,000, sellers may gain the upper hand in the short term.
At the time of this writing, Bitcoin was valued at $107,017.
Image from a free stock source, chart from TradingView
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