After the Bitcoin price dipped below $100,000 over the weekend, it rebounded by 10%, reclaiming $106,000 again. This is a delightful development as it provides some breathing room for altcoins that have seen significant declines. However, due to the emergence of the double top pattern and the Fair Value Gap (FVG) near the weekend low that is expected to be filled, this upward momentum may not last long.
Bitcoin completes a liquidity sweep, forming a double top.
After Bitcoin's price broke through $106,000, cryptocurrency analyst Louigi pointed out that the digital asset may have formed a double top, which is bearish for cryptocurrencies. Meanwhile, the Buy Side Liquidity Sweet has completed, and the market is determining a new direction.
As the price trend shifts, signs of buyer fatigue emerge due to the initial stagnation of the price. This indicates that bullish momentum has weakened, and this weakening started at the key resistance level of $106,600, where a retracement is expected.
This cryptocurrency analyst stated that after a significant rise in Bitcoin, a gap emerged between buyers and sellers, commonly referred to as the Fair Value Gap (FVG). Prices often tend to retrace to these areas to restore balance, and these gaps are usually filled quickly.
In this scenario, there are multiple Fair Value Gaps extending down to $102,000. The first gap is in the area below $105,000, which the analyst claims is also the 0.28 Fibonacci retracement level and the first retracement line. Louigi explained that if the price falls to this level without support, it will lead to a shift in price towards the second gap, which is below $104,000 at the 0.5-0.618 Fibonacci retracement level.
Last but not least, the 0.618-0.65 Fibonacci level at $102,000 is a key point for Bitcoin. If this level is not maintained, a retracement to the 0.786 Fibonacci level, which is slightly above the $101,000 mark, may occur.
Why this argument may be overturned.
This cryptocurrency analyst indicated that Bitcoin's price formed a double top at $106,600, which means it had peaked at that time. However, Bitcoin's price then surged and even briefly exceeded $108,000 before retracting.
As prices rebound, this could mean that the FVG below $106,000 may still be unfilled as Bitcoin approaches a historic high. With less than a 10% increase from the historic peak, bulls are likely to dominate in the third quarter.
