Bitcoin Drops 10% After Weekend Surge, Holds Key Support

Bitcoin experienced a typical weekend price surge and subsequent drop, with the price now resting at a crucial support level. Despite this decline, the overall market structure remains bullish and poised for another upward movement.

Bitcoin (BTC) began the week with a sharp decline following an unsustainable rally on Sunday that drove prices higher. The impulsive sell-off on Monday brought the asset back to a critical support zone, but the broader outlook remains optimistic.

Bitcoin continues to trade within a well-defined bullish channel, and the current correction is testing key levels that could serve as a launchpad for the next upward move. If this zone holds, there is a strong possibility that Bitcoin will push to new all-time highs in the coming days.

Key technical points include Bitcoin respecting its bullish ascending channel, maintaining higher highs and higher lows. The price is testing a support confluence zone at a specific level, which includes the 0.618 Fibonacci, the VWAP, and the channel low. Despite the short-term volatility following the weekend spike, the bullish structure remains intact.

The corrective move seen over the past 24 hours is characteristic of weekend-driven volatility, where thin Sunday volume can lead to exaggerated price swings. While the pullback may seem dramatic on lower timeframes, it has delivered Bitcoin to a significant technical zone with multiple levels of confluence. This makes the current area not just a support level, but a potential accumulation zone.

Importantly, the broader market structure remains bullish. Bitcoin continues to form higher highs and higher lows, and the ascending trading channel has held firm through the recent retracement. Holding this support region could establish the foundation for the next bullish rotation. Technically, it’s a high-probability zone for long setups, provided price consolidates and begins forming a base on intraday charts.

From here, Bitcoin must stabilize above this support confluence and establish a bottoming formation, a typical precursor to renewed momentum. If successful, this would open the door to a move toward the channel’s upper boundary. That upper trendline, which hasn’t been tested during the current move, remains a likely price target if bullish momentum returns.

Bitcoin continues to hold a bullish narrative despite recent weekend volatility. If current support levels remain intact, price is likely to rotate higher and make another attempt at all-time highs this week. A brief period of consolidation at these levels could represent the calm before the next breakout.