Bitcoin weekly: $109k holding on by a thread

After a bounce early in the week, bitcoin and altcoins alike struggled to regain their footing after the recent flash crash. In the end though, bitcoin put in a decent weekly close, keeping support at $109k intact, with the price target of $142k still in play.

Also watch the accompanying chart analysis on YouTube.

In the bigger picture, what we’re seeing right now is this tug of war between shorter term sentiment and longer term structure. Meaning the conditions for a crypto bull market are still favorable, with good liquidity, upcoming rate cuts, and much improved regulation. Those are strong driving forces, but right now they are being overshadowed by a sentiment that has turned somewhat fearful.

While the underlying structural forces are slower to change, sentiment can change fast. So if the sentiment turns around again, the conditions are still there for BTC to start rallying, and for altseason to pick up the pace.

Chart-wise, it looked like bitcoin was going to close the week well below the $109k level, breaking the support that has held all the way back since early July. In the end though, late on Sunday it bounced, and the week closed right below $109k, actually making the weekly close look decent. The inverse head & shoulders breakout is still in play, with the price target remaining at $142k.

Bitcoin dominance continued to bounce this week. It still remains below the 40 week EMA however, and until that changes, the trend is still down. While altseason has been on pause over the past couple of weeks, it’s not dead yet.

All in all, despite the recent weakness, it’s still too early to call the cycle top. Like we had a fake-out to the upside two weeks ago, last week’s dip could turn into a fake-down in the opposite direction.