The central theses
- Bitcoin has gained nearly 1,650 points in market value since Monday’s open.
- The TD Sequential indicator is showing a buy signal on the weekly chart of BTC.
- A sustained close above $33,000 could lead to a rally to $38,600.
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Bitcoin appears to be gaining momentum for a significant recovery. Still, the pioneer cryptocurrency has yet to surmount a significant resistance zone.
Bitcoin aims to break the resistance
Bitcoin started positive on Monday after closing its first green weekly candle in ten weeks.
The flagship cryptocurrency has gained nearly 1,650 points in market value over the past few hours. The sudden spike in volatility propelled Bitcoin to a high of $31,500. Further buying pressure is expected if BTC can clear a final resistance area.
Tom DeMark (TD) sequential indicator suggests that Bitcoin may have the momentum to surge higher. On the weekly chart, it presented a buy-signal in the form of a red nine-candlestick. The bullish formation indicates a one to four week candlestick upleg.
Bitcoin would need to break $33,000 to confirm this bullish outlook. By doing so, it could encourage sidelined investors to re-enter the market and propel BTC to the next level of resistance around $38,600.
BTC/USD one week chart. Source: TradingView
Interestingly, over the past week, the supply of Bitcoin on trading platforms has decreased dramatically. On-chain data from Santiment shows around 50,000 BTC worth $1.5 billion since May 30.
The notable drop in bitcoin balances on exchanges suggests fewer tokens are available for sale, which could also be a positive sign for short-term price action.
BTC supply on exchanges. Source: Santiment
Still, Bitcoin’s bullish thesis can only be validated if it converts $33,000 into support. Otherwise, the market could create even more fear and trigger another sell-off. If that should happen and BTC suffers a weekly close below $27,000, the next area of interest could be much further down around $21,000.
Disclosure: At the time of writing this article, the author of this article owned BTC and ETH.
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