BTC has put in an impressive performance this week, breaking a large downtrend line and the September high of $ 52,900. It hit a weekly high of $ 56,100, challenging a technical resistance area in the chain between $ 55,000 and $ 58,000.
The rally saw profit-taking on new (recently purchased) coins while old coins continued to hold. Although many weakly armed investors who bought over $ 50,000 in BTC earlier this year panicked to sell during the May liquidation, we can expect short-term selling pressures from some remaining investors.
BTC / USDT daily chart | Source: TradingView
Given the existing selling pressure, BTC may need more time to break through this zone before confirming a major breakout towards the previous all-time high of $ 64,800.
The calm before the storm
The small timeframe technical indicators have hit the overbought area, suggesting that a consolidation or small pullback is needed before the next big move begins. For now, BTC is still holding above the September high of $ 52,900, a very important level. Bitcoin needs a weekly closing price above it in order to continue confirming the boom and bear trap.
Weekly BTC / USDT Chart | Source: TradingView
A weekly close above $ 52,900 is a very bullish signal as the bulls will continue to challenge the resistance area between $ 55,000 and $ 58,000. The more often a resistance area is tested, the weaker it becomes and the more likely it is to break out if enough buyers enter the market.
BTC balances on the exchanges are rising slightly, but remain at annual lows
In addition to BTC hitting the overbought territory for a short period of time, there has been a slight spike in centralized exchanges (CEX) balances in the past few days as new coins begin to profit. In the short term, this is a cautious signal, but we must note that this balance remains at its lowest level in many years.
BTC balances on the exchanges have been steadily decreasing since the start of the year as investors continue to withdraw BTC from the exchanges, causing a supply shock for Bitcoin.
The bulls eagerly await the weekend to see if BTC can hold above the key price zone of $ 52,900. If they can keep the buying pressure going, they are more likely to break the strong resistance at $ 58,000.
Above this level, the bulls will have complete control of the market and Bitcoin can quickly move towards new ATH levels.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
According to Cryptopotato