- Bitcoin temporarily surpassed $42,000, the first time since April last year
- It is eyeing eight straight weeks of green for only the third time since 2013
- As Bitcoin rests on an ETF-supported price, questions arise about its upper limit and potential consequences
Bitcoin crossed $42,000 overnight for the first time since April last year, promising to put in the eighth green week in a row. Were it to achieve this it would represent the first such gains since April 2017, a sign that we are very definitely at the start of a new bull market. However, this is far from confirmed and the question is starting to be asked now ‘How much higher will Bitcoin go?’. With Bitcoin’s price sitting on a cushion of ETF air, what can we expect if the local top is in?
Bitcoin Approaching Key Resistance
We can get a very clear idea of how well Bitcoin has performed this autumn by looking at the weekly chart:
As we can see, Bitcoin is getting very close to a key line of resistance, the one that more or less confirmed a bear market back in April 2022, the last time the price was around this range. Bitcoin has been on a relentless march since the first week of October, and if it can remain green for the rest of the week it will be the first time it has achieved this in six and a half years. This pattern has only played out once before, in early 2013, showing its rarity of it, and thus its unlikelihood.
Assuming that Bitcoin has topped out, for now, where should you look to reload? There are two primary areas of interest we can look at:
A shallow pullback to the prior resistance of $38,000 would be extremely bullish for Bitcoin and would suggest that the appetite for Bitcoin is the strongest it has been since 2020. We could also see a larger dip back to the low $30,000s. Providing it didn’t close on a weekly level below this range it would still act as a crucial higher low and set Bitcoin up for a return to the $40,000s imminently.
Bitcoin ETF Reaction Will Depend on Price
The reason for the drive in price is, of course, the promise of a Bitcoin ETF. Final decisions on this are now due within a month or so, and what Bitcoin will do upon any positive news on this front will be impacted by its price at the time: a Bitcoin in the $40,000s will likely correct after a spike up, while a Bitcoin in the low $30,000s will likely accelerate back up to the $40,000s and beyond.
For now, an extended Bitcoin should be a sign of caution rather than outright panic; what goes up must come down.
