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The bitcoin price has shown impressive strength lately, outperforming global stock markets, despite a risk-off environment and a rising U.S. dollar.
On Friday, BTC retested the local highs at $48.1k and managed to make a solid 4-hour close above resistance, leading to a robust daily close at $49.3k.
Aggregate spot exchanges volume came in at $7.56 billion, above the 14-day average and the volume on risk-off days. For the past week, 4-hour bearish divergence and realized price distribution between $47-48k acted as initial resistance and led to a near-term pullback to $43.9k, a highly confluent area for retesting successfully short-term support.
As usual, BTC longs were liquidated on the way down, and short positions began piling on. The 5-day long pullback registered net outflows on spot exchanges, which strongly suggests the price dip was being accumulated.
Weekly BTC Chart Showing Bullish Bounce
So far, BTC price is following the ideal bullish scenario on the weekly timeframe, where BTC saw a near-term pullback at the start of the week, the found a local bottom, pushes higher into the weekend to make a solid weekly close at the highs.
This is critical for mid to longer term structure. Making a second weekly close above the 21-week (currently at $43.6K) and 200-day moving average (currently at $45.7K) will further validate the significant technical buy signal which flashed last week.
In the chart below, bitcoin nearly backtested the 21-week moving average, and pushed higher, forming a bullish hammer candle on the weekly chart.
4-hour Momentum Showing Strength
The current conditions considering fundamentals, technicals, on-chain metrics, and momentum look favorable for a break above $50k soon.
The 4-hour momentum on the relative strength index (RSI) has formed a downtrend for over a week, but began testing the trendline as BTC price was testing resistance at $48.1k.
Spot exchanges’ buying pressure and short liquidations helped push bitcoin above resistance, assisting BTC to form another higher high.
As of now, BTC has managed to break above the 4-hour downtrend on the relative strength index, a near-term sign of strength.
The bitcoin price is now starting the weekend above resistance, following 4-hour bullish momentum, and on-chain metrics showing continuing strength with no major spikes in spot exchange reserves or spot inflows.
It is important for spot buying pressure to continue throughout the weekend to absorb any incoming supply on the market. $48k to $50k price area has moderate realized price distribution and some technical resistance. Once supply at this price range is absorbed, we can expect a push higher, above the $50k mark.
$51.1-58k: The Next Major Resistance Zone
Looking ahead, the $51.1k to $58k region is a significant zone of resistance that BTC must break above.
This zone, particularly between $56-58k, has a much higher UTXO realized price distribution than the $47-50k zone.
The $56-58k area is also confluent with a major Fibonacci retracement zone at $57.1k. We can expect technical and on-chain selling pressure initially, but if large buyers enter the market and absorb these blocks of supply, the path to retesting all-time highs (~$65K) will become smoother after $58k is reclaimed.
The recent rally from $43.9k to $49.4K gives the bulls the lead as the recovery continues.
As mentioned above, if BTC can successfully make a second weekly close above the 21-week and the 200-day moving average, this will further validate the technical buy signal, and provide a boost to higher time frame momentum to the upside.
Over the near term, from the support levels side – the bulls need to protect $48k on all pullbacks, continue absorbing supply, and start testing resistance at $50k. Maintaining bullish technicals and on-chain signals throughout the weekend make it more likely for a push towards $50k soon.
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Cryptocurrency charts by TradingView.