Bitcoin tests a key support level at $11,300, what happens if it breaks below it?

BTCUSD daily chart

Key takeaways: Bitcoin tests a key support level at $11,300, what happens if it breaks below it? CME futures gap theory suggests a $9,700 target. Ether formed an ascending triangle pattern, what it means for the price?

16 oct gap

After reaching a peak at $11, 700 on Monday, bitcoin since experienced a correction, going down 4%. In our yesterday’s episode of Bitwala Candles we called for the gap on CME futures daily chart to be closed and this is exactly what happened today. BTC reached the $11,200 mark filling the gap and proving the theory quite accurate once again. It is also important to keep in mind that there is another gap that has not been closed yet, which is all the way down at $9,700. In order to close this gap, bitcoin price will have to decrease 13%.

16 oct btcusd daily

Currently bitcoin is testing a key support line at $11,300. Breaking below this level may lead to some sideways action within the golden pocket (between 65% and 61,8% on Fibonacci Retracement). There is also a 20-day moving average to support BTC at this price level. However, in a more bearish scenario, we might see a further 6% decline, to the next support level at $10,500.

However, technically bitcoin is still in a bull trend, as it keeps establishing higher lows. In this case, the price might bounce off $10,700 to maintain the trend and head to the upside. There is even a possibility to re-test the $11,700 price mark.

16 oct ethusd daily

As for the Ether it appears that the price action remains within the ascending triangle pattern. There is a resistance level established at $390. The price is currently supported by a 20-day moving average. Breaking below it will lead to a re-test of the support level at approximately $350.

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