- Bitcoin jumped above $42,000 over the weekend but this was a typical weekend fakeout
- The adage that you shouldn’t trust a weekend pump came true as it dropped under $40,000 again
- Regardless, Bitcoin could finally be preparing to break $42,000 once and for all
A typical piece of Sunday night fakery left Bitcoin to close the week under $40,000, raising concerns of a prolonged return to the 11-week range that has become its staple. However, early suggestions are that Bitcoin is more likely to find support under $40,000, setting up a higher high and higher low and leading to a more concrete breakthrough later in the month.
Bitcoin Punished Late Longers
Bitcoin has staged a remarkable 10-day rally off $29,000 to cross $42,000 on Friday, taking it above the crucial resistance line that to all intents and purposes marks the end of the mini bear market. Over the weekend it seemed to have retested this line and turned it into support, but the old adage of a Monday dump always following a week of green came true:
This Sunday fakeout and dump means that Bitcoin is once again back in the channel it first dropped into in mid-May, leaving Sunday night pump-chasers to regret their decision:
The situation isn’t all bad however. Barring China telling chickens they’re banned from holding Bitcoin or something, there’s not a whole lot more FUD that can come Bitcoin’s way any more, at least for the moment. This means that a drop back to $30,000 is unlikely given the length of time it has spent in the channel and the strength it showed in getting to $42,000 in the first place.
Support at $37,450 Would be Ideal
Looking back at the chart there is a band of resistance at $37,450 which is a very tasty resistance/support flip target:
If Bitcoin can indeed turn the area into support then that will present a perfect higher high and higher low off the bottom, presenting a platform to break through the $42,000 again, this time not from an overextended position.
If Bitcoin has hopes of emulating the 2013 bull run and having a dual-top then it can’t spend too much longer in this range. It has five months to equal its prior high, which in 2013 it achieved in November, which is typical Bitcoin bull season.