Bitcoin fell during the week ending April 18th, initially rallying above the $60K level before selling off, dropping sharply to about the $51K level over the weekend and closing the weekly candle with a long-tailed bearish hammer. This is a somewhat bearish looking candle as BTC gave up all of the previous week's gains and then some, though we are conditioned at this point to know this ~20% drop may be a standard bull market correction.
(April 18, 2021 8:30PM EST)
Bitcoin's sweet week turned sour over the weekend as a series of liquidated overleveraged Bitcoin longs trading at 150x on the Binance futures market were liquidated, causing a cascade of forced-sells over the low-volume weekend session that took BTC's spot price down to about $51K. However, because this appears to have been caused by the Binance futures market, Bitcoin prices on various exchanges were different, offering arbitrage opportunities, but Binance futures actually saw BTC prices in the low $40,000s for a brief time before buyers quickly stepped in to buy the dip.
Bitcoin has recovered quite a bit, ending the weekly candle around $56K and forming a long tail on the candle. This is something we will watch going forward, however as we have experienced before, 20-30% corrections are just another day in paradise for Bitcoin. I suspect that once markets open again in Asia tonight and Europe/NY in T-12 hours, investors and institutions will jump at the chance to buy Bitcoin below $60K given the current trend and fundamentals.
We should see continued bullishness and a breach of $60K in the next week or so, which is not a significant resistance level so we should see Bitcoin break higher by April the latest. Once Bitcoin impulsively breaks above $60K and holds it, we should see a run-up to $70K, $80K, and over the medium-term, $100K. But to keep things in perspective, $10K moves are likely to be the norm going forward.
Below is the Bitcoin Dominance (BTC.D) weekly chart, showing Bitcoin's drop in dominance over the weekend following the sharp Saturday selloff. As you can see in the circles below, we're now roughly at the July 2017 levels where Bitcoin started a summer rally to new highs around $5K by the end of Q3 before making one final correction before the ultimate parabolic run up. This is a weekly chart, so we're not that close to a peak just yet as all indicators point to a bull market lasting many more months late into 2021 and possibly 2022. However, this does align with the recent strength in altcoins, but more importantly points to a possible bounce in BTC in the coming weeks that should thrust BTC to lofty new highs, and I don't mean a nominal new high at $66K.
Support: Immediate support around $55K, which seems to have held despite a brief break then recovery, then $52K; roughly the bottom; Floor at $50K.
Resistance: $60K, then $70K, $80K, then $100K.