Apparently, on-chain analyst Willy Woo was right in arguing that bitcoin bulls are accumulating positions to break the key resistance level of $42,000 per coin.
My instinct that a breakout might occur on the weekend also did not disappoint, although this is more intuition than analysis results.
Nevertheless, the key resistance level of 41,980.24 is broken, surprisingly easily, by one bar and almost without a pullback. It even looks suspicious since the breakout occurred in the absence of strong positive drivers, or rather, even despite potential negative ones.
Against this background, many questions arise. Will the price roll back down to confirm the 41,980.24 mark as support? How soon will it reach all-time highs? And in general, will this breakout happen? We will unravel this tangle gradually, but first, let's look at the fundamental background.
The key driver that may affect the cryptocurrency market remains the US infrastructure bill. The debate on it continues, while a vote on it should take place on Tuesday. Under the bill, the authorities want to extract $30 billion in taxes from companies associated with the cryptocurrency industry. This caused a furor, raising the seriousness of the issue to such an extent that even US senators made amendments to change the wording of the bill.
As Tuesday approaches, market participants are likely to consider the likelihood of any outcome in the vote. Anything can happen in the cryptocurrency market, and it's worth keeping in mind. Against this background, quotes may be sensitive not only to news but also to rumors.
The second issue remains regulation. This is not a quick topic, and it is unlikely to rip the palm of urgency from the infrastructure law. However, the prospect that the US will take control of the cryptocurrency may be a bearish factor locally.
But you need to trade what you see, not what you know, so let's move on to the technical picture. It will now be a priority.
The 41,980.24 mark was broken, there was no rollback to it as such. Nevertheless, the next local level of 44,807.24 (red dotted line) was broken on the second attempt. Yesterday, the breakout was false, today it may turn out to be true. But the candlestick is not yet closed, which means that no final conclusions can be drawn yet. This means that if the breakout turns out to be false, there is a possibility of confirmation of support at 41,980.24, trading in the sideways at 41,980.24 - 44,807.24 for a certain period.
In fairness, it is worth noting an alternative scenario in case the breakout of the horizontal at 44,807.24 turns out to be false: a return under the level of 41,980.24. I would like to say that this is unlikely, but in the cryptocurrency market, you cannot doubt anything from happening.
Let's go further: where will BTC/USD move if the consolidation above the level of 44,807.24 occurs? Remember that history repeats itself, and we look at the levels that worked in a wide range of 41,980.24 - 64,883.36 from February to May. The next target is also marked with a red dotted line and is at 48,178.13.
And if bitcoin quickly or slowly but successfully passes these boundaries, it will be possible to talk about the psychological mark of $50,000 per coin and the next technical level of $52,000.
Then there will be only a couple of milestones to the historical maximum. We will consider them when it is relevant.
In the meantime, focus on the level of 44,807.24 (red dotted line) and the development of events around the infrastructure bill.
