Bitcoin BTC $56,714 faces a critical challenge this week as bulls aim to secure a weekly close above $59,000 to regain control. The cryptocurrency’s rebound from six-month lows at $49,500 faces significant resistance, making this target crucial for maintaining upward momentum.
Weekly Close Critical for BTC
Popular trader and analyst Rekt Capital highlighted that Bitcoin’s next weekly close must hit $59,000 to confirm a successful reclaim of key support levels. This target is essential for Bitcoin to stay aligned with its behavior since its all-time high in March.
BTC/USD chart. Source: Rekt Capital/X
“It has happened,” Rekt Capital noted, referring to Bitcoin’s upward reversal. “Now, Bitcoin will need to close above ~$59,110 later this week to reclaim the bottom of the black channel as support and confirm a return into the pattern.”
However, this pattern faces challenges as Bitcoin has experienced a series of lower highs and lower lows, with resistance building at $70,000 and above.
Long-Term Market Strength Concerns
Another analyst, HTL-NL, pointed out concerns over Bitcoin’s long-term market strength, focusing on the relative strength index (RSI) levels on monthly timeframes. The analyst warned that a succession of lower highs in RSI suggests decreased chances for Bitcoin to return to price discovery.
BTC/USD 1-month chart with RSI data. Source: TradingView
“Word of warning: technically this looks like we had the cycle top already and not only that: we also had the bigger cycle top,” HTL-NL wrote. “Meaning a lot of the elasticity had gone out of the PA. You can see that from the decreasing RSI at each high.”
Macro Economic Influences
Despite technical challenges, some analysts believe that global macroeconomic changes could spur a broad crypto and risk-asset comeback. Former BitMEX CEO Arthur Hayes predicts that the US will soon begin adding liquidity, which could positively impact Bitcoin.
In his latest blog post, Hayes suggested that the US Treasury might inject between $301 billion to $1.05 trillion into the market by year-end. “TL;DR: Bad Gurl Yellen will inject $301bn to $1.05tn between now and year-end,” he wrote, referring to US Treasury Secretary Janet Yellen.
BTC/USD 1-hour chart. Source: TradingView
Hayes also noted that Bitcoin’s near-term performance would depend on the interplay with the US dollar and Japanese yen pair, following the unwinding of the yen carry trade.
Current Market Position
At the time of writing on August 7, Bitcoin traded around $57,500 ahead of the day’s Wall Street open, according to data from TradingView. Whether Bitcoin can secure the critical $59,000 weekly close remains to be seen, but it will be a key factor in determining the next phase of its market journey.
