There’s no question, the last few days have been scorching for the crypto markets, both for Bitcoin (BTC) and a number of altcoins. But now, even as Bitcoin appears to have broken the downtrending market structure and begun a reversal to an uptrend (depending on how you draw the chart), there is another major hurdle for the leading crypto to clear just on the horizon.
We go to the 3-day chart to see this key resistance level, surrounding $9,100. This was a key level in mid-2019, both on the way up to $14k and down to $6,400. Bitcoin’s recent rally has come to this level, but not actually made contact with it. Thus, we don’t know how exactly Bitcoin will react at the first engagement.
Getting and staying above this price level will very nearly confirm a long term trend reversal from down to up; although a final confirmation can only come with a higher price high at about $10k. We can also see on this chart the flood of buy volume that has been coming in during the past couple of weeks, although the fireworks have not yet begun in this regard.
Coming way down to the low timeframe charts for some short term analysis of the recent rally, we see on the 4-hour chart that the overbought conditions from yesterday have been cooling off. But with a bullish engulfing candle, and a reversing histogram arch, we could actually see another leg up to the $9k area from here – although that is a risky proposition after so much upside.
If another leg up does come, it is likely to be the final one of the current rally, after which a period of correction is likely to follow.
Finally, we switch to the Bitcoin market dominance chart to observe what has been a dramatic change in trend direction. BTC dominance has made a huge retreat from the 70% level in the pasty day, even as Bitcoin’s price continued to rise.
This reflects the double digit gains that some alts have got in the past days, and is indeed the perfect scenario for altcoins to do well: when Bitcoin’s price rises even as its dominance falls. It now seems likely that BTC dominance will continue this powerful downward trend.
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