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Bitcoin is grappling with intensified volatility following a sharp selloff triggered by US President Donald Trump’s abrupt announcement of a sweeping 50% tariff on all EU imports starting June 1. The unexpected macroeconomic move sent shockwaves through assets, and Bitcoin was no exception, dropping aggressively from all-time highs near $111,800 to lows around $107,500 in a matter of hours.
Although there was a brief recovery towards $109,000, the ensuing price action now shows an intense battle between the bulls and bears, with technical analysis on the 1-hour candlestick timeframe showing the two ways Bitcoin can play out this week.
Bitcoin Compression Structure Between Fair Value Gaps
According to crypto analyst TehThomas, Bitcoin’s current price structure is defined by two opposing 1-hour fair value gaps (FVGs). The lower FVG zone identified by the analyst is around $107,500, which showed up during the rally towards $111,814 ATH and is now acting as the first significant reaction point post-rally.
The upper FVG range is between $109,800 and $110,700. This level, previously the base of a breakdown candle, flipped into strong resistance on Friday. Interestingly, a rejection was confirmed inside this upper FVG, which showed there were many sellers present in that zone.
Notably, the 1-hour chart shared by the analyst points to a deadlock scenario for the Bitcoin price. A breakout above or below the identified fair value gaps will likely define the directional bias for Bitcoin’s next major leg.
Bitcoin’s next impulsive move will likely come with volume confirmation, either with a bullish displacement above resistance or a bearish rejection that pushes the Bitcoin price toward a lower demand target.
Bullish And Bearish Scenarios For Bitcoin
Interestingly, since the analysis, the ensuing price action has been marked by Bitcoin’s failure to reclaim the upper FVG and more of a consolidation around the lower FVG at $107,500. This places the most significance around this level, as Bitcoin’s reaction here could either cause a rebound upwards or a significant price retracement.
For the bullish scenario, a bounce at the lower FVG will send the Bitcoin price towards the upper FVG. A sustained move above the upper FVG at $110,700 would indicate a bullish reclaim and might bring a new all-time high around $113,000 back into focus.
For the bearish scenario, especially with a clean loss of the $107,500 level, the path opens for a move toward $106,000. This level is aligned with a liquidity pool left behind from consolidation early last week. If the structure breaks downward below $106,000, sellers may seize control in the short term.
At the time of writing, Bitcoin was trading at $107,017.
Featured image from Unsplash, chart from TradingView
