The Bitcoin price has closed higher for seven straight days. The last time this happened, BTC jumped 80% in the next month. But could it happen again?
Bitcoin is higher by 6.18% to $39,270, a seven-day increase of 32.51%.
It appears BTC is not ready to concede on its attempt to crack $40,000. Despite Amazon’s (NASDAQ: AMZN) denial that it would soon accept cryptocurrency payments, the bulls are unphased.
Following the dip below $30,000 on the 20th, the Bitcoin price has added more than a third to its value. Furthermore, the impressive winning streak of seven back-to-back green daily candles sets a record for this year.
When Bitcoin last managed this feat in December 2020, the price rallied from $18,000 to $23,000 between the 12th and 19th of the month. And by the 8th of January, BTC was trading at $42,186.
And this is where it gets interesting.
BTC trading pattern
After topping out just $42,186 on January the 8th, the Bitcoin price retraced 30% to $28,700 in the following two weeks. A fortnight after that, BTC was back to $40,100. And in the 2 weeks following, it had climbed to $57,800.
When Bitcoin collapsed in May, the reversal came from $28,800 and again topped out just above $41,000. When that rally failed, it retraced to $28,700. And as we speak is once again approaching the top end of the range between $40,000-$42,000.
Considering the price action over the last week or so, it appears that BTC may clear this strong area of resistance, which will have the bulls wondering if history could repeat.
However, the resilience of the price suggests BTC may not be rejected at the second attempt.
Above the market, the 100-day moving average sits at $40,563 and was the reversal point of Monday’s climb above $40k, and considering the historical context, it should be viewed as significant resistance. However, If Bitcoin advances beyond $40,600, it will face the 200 DMA at $44,713. And should that average give way, the bulls will be aiming for $60k+.
On the other hand, if the Bitcoin price stalls here, the bears will claim victory. A reversal from $40,000 could set the price up for a fall because previous botched attempts to clear this psychological resistance have resulted in steep declines.
Therefore, until a resolution, both the longs and the shorts will be nervous.