BTC heading to a critical weekly close, will hold $52.9K?

BTC heading to a critical weekly close, will hold $52.9K?

BTC had an impressive run this week, managing to break above a key downtrend line and the September high at $52.9K. It managed to hit an intraweek high of $56.1K and break deeper into the zone of technical and on-chain resistance at $55K-$58K.

The rally so far has seen profit-taking from much younger coins while the older cohorts continue to hold steady. Although many weak hands that bought BTC above $50,000 earlier this year quashed the panic during May's liquidation, we can expect some remaining investors looking to break even to increase selling pressure in the near term, particularly between $55,000 and $58,000.

Chart according to TradingView

Given the technical and strong on-chain price distribution in the $55,000-$58,000 zone, it could take BTC several attempts to break above these levels before a major breakout towards the previous all-time high at $64.8K is confirmed.

Consolidation before the next big step?

Short-term technical data, particularly on the 4-hour chart, reached slightly overbought levels, suggesting a consolidation or small pullback is needed before preparing for the next big move. At the moment, BTC continues to remain above the September high at $52.9k, a very important level. Bitcoin needs to make a weekly close above to continue the breakout and validate the bear trap.

Chart according to TradingView

A weekly close above $52.9K is a very bullish signal and increases the chances of retesting the $55K-$58K resistance zone. The more resistance is tested, the weaker it becomes, further increasing the likelihood of breaking resistance if enough buyers enter the market.

Slight upward trend in foreign exchange spot reserves – still at multi-year lows

In addition to BTC hitting short-term overbought levels, there has been a slight increase in forex spot reserves in recent days as younger coins begin to take profits. This is a short-term cautious signal, but we must remember that reserves remain at multi-year lows.

FX spot reserves trended lower throughout the year as investors continued to buy BTC and withdraw from exchanges, adding to the massive supply shock.

Chart from CryptoQuant

Bitcoin bulls are eagerly awaiting the weekly close to see if BTC can rise above the critical $52.9k level. If they manage to maintain buying pressure and push BTC above $58,000, the odds of an all-time retest increase significantly as there is much less resistance above $60,000.

Is global risk-on trading coming back?

The SPX managed to hold a key intraweek low and showed several daily closes higher, indicating a double bottom and a reversal in the making. The dollar was flat as money flows out of longer-term bonds, suggesting risk-on trading could return as investors try to overcome near-term uncertainties.

Overall, the trend in fundamentals, technicals and on-chain values ​​remains firmly bullish as long-term holders held on despite this year's severe drawdowns, FUD, liquidation events and uncertainty. Recent price action has shown that the bulls are firmly regaining control from the bears. Bitcoin's outperformance relative to other risk assets during key risk-off events in September is a key sign of strength for the largest cryptocurrency, suggesting continued outperformance once markets resume risk-off.

The weekly close relative to $52.9K will likely determine BTC’s direction for the coming weeks.

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