Bitcoin (BTC) Price Successfully Tests Weekly Key Support Despite Flash Crash to $58,000

Bitcoin (BTC) is successfully testing weekly key support despite quickly crashing to the $58,000 price level on Aug. 27.

Bitcoin (BTC) price is successfully testing a key support level on the weekly timeframe despite quickly crashing to the $58,000 price level on Aug. 27. A trader known as Rekt Capital noted that if BTC manages to close the week above $58,447.12, it could confirm the return into an important price channel, potentially gearing it to reach the area between $60,500 and $61,500 in the short term.

On the daily timeframe, the trader added that the crash also served as an opportunity for Bitcoin to successfully test the resistance of its previous downtrend channel as support. Notably, Rekt Capital explained that a successful retest of this daily support would fully confirm the breakout and precede upside continuation, which ended up happening.

As a result, Bitcoin could be gearing up to fill a new CME gap located between $60,500 and $61,500, as the trader noted that BTC has filled every gap registered in the past six months. CME gaps are the deviations between the closing and opening price of Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), hence the name. Usually, BTC price moves to cover the discrepancies between the spot and futures markets.

Bitcoin price crashed on Aug. 27, but the downturn wasn’t related to any major development in crypto or the macroeconomy, according to Aurelie Barthere, Principal research analyst at Nansen. Speaking to Crypto Briefing, she said that the market has been choppy since March, and the flash dump is just a regular movement after Bitcoin got rejected at the $62,000 resistance.

“This could explain the large red price candle for BTC yesterday,” she added.