Bitcoin price (BTC) failed to hold the psychological barrier of $ 10,000 and failed to break through the resistance of $ 10,400. This failure led to a corrective move to $ 9,450, leaving a gap of $ 400 CME behind. After the severe correction of Bitcoin, many altcoins also saw a decline of more than 10% yesterday.
But does this mean the rally is over?
Not breaking $ 10,400 caused a 10% sell-off
Bitcoin's price failed to break through the $ 10,400 resistance level, which sent the coin to the next support zone - found at $ 9,500. As discussed in the previous analysis, a pullback is still very healthy for the market. Bitcoin alone has managed to skyrocket from $ 6,900 to $ 10,400 in the past six weeks - this usually means an adjustment is happening.
The overall market structure is still intact, as prices are still creating higher highs and higher lows. However, BTC needs to keep the range $ 9,400- $ 9,500 as a support. Further declines will disable the higher bottom structure, which means that further downward momentum is guaranteed.
Bitcoin's correction created a gap of $ 400 CME
The CME chart is showing a gap of $ 400. These gaps appear during weekends when CME trading is closed. The market has a standard story that these gaps need to be closed before the price can continue moving, meaning that the price of Bitcoin can bounce back up to $ 10,400.
There is no guarantee that these gaps will be filled and the chart is still providing a few open gaps at the moment as there is one gap at $ 11,800 still open and another gap at the level. lower.
Total crypto market capitalization finds resistance at $ 300 billion
Total market capitalization was also due to a number of corrective movements when it reached $ 140 billion in two months. Market capitalization increased from $ 167 billion to $ 305 billion but could not break the resistance of about $ 300 billion.
That is still not a bad sign for the market dynamics. The 2019 rally also shows corrective movements along the way - often the "buy the dip" opportunity.
The green rectangle is an important support that the total market capitalization needs to hold. As long as total market capitalization holds around $ 250-265 billion as a support, the continuation seems to be happening to the market. This area will provide support, although it used to be resistance before a breakout a few weeks ago.
Altcoin market capitalization is bounced back to a big support
The total altcoin market capitalization shows a similar structure to the total capitalization of the entire cryptocurrency market. However, the more serious decline of altcoins than Bitcoin, implies that there is currently a positive correlation in the market.
Why would this be a problem? Altcoin has pulled back stronger than Bitcoin yesterday. However, today altcoin also recovered stronger than Bitcoin. This may imply that there is a temporary positive correlation.
$ 112 billion is the last major barrier before altcoins can test the area of $ 140-145 billion. However, this resistance level cannot be broken right now, which means that some support must be found. This support is currently seen at $ 92 billion and on the daily chart it is possible to see a 10% increase since then, implying that buyers will join here.
Ether proves stronger than Bitcoin
Ether (ETH) has recently shown strength over Bitcoin, as it increased 135% from a low of $ 121.
To date, ETH has surged more than Bitcoin in 2020 and today's bounce also implies that buyers are still willing to join this altcoin. A retest of the $ 230- $ 235 level is also a sign of strength as the ETH price is currently creating a higher bottom. These higher lows imply that an uptrend is still taking place.
This level is an important area and if the price fails to hold this level, a further drop to $ 190 is probable. However, if the price sustains $ 230- $ 235, it can create momentum to $ 280 and possibly $ 360.
The bullish (bullish) scenario for Bitcoin
The bullish scenario is relatively simple at this time. Bitcoin price needs to hold the $ 9,400- $ 9,500 area as a support, which will confirm a higher low and continue to push higher.
If this area continues to support, a continuation towards the upside may occur. Another argument indicates that the CME gaps are filled. The CME chart provides two gaps in current price increases: one at $ 10,400 and the other at $ 11,800.
If this level holds, that is likely to see the $ 10,400 CME gap close. However, if the market is providing strong upside momentum, a continuation towards $ 11,600- $ 11,800 will be the next target.
It is not surprising to see a 10-15% pullback in an uptrend market. The 2019 rally from $ 3,100 to $ 13,900 also recorded several corrective movements of 10-15%. However, the structure of higher peaks and higher lows is never broken. This shows that keeping the range of $ 9,400- $ 9,450 as support is very important.
The bearish scenario for Bitcoin
A bearish scenario could still occur. For this scenario to work, a test of $ 9,900- $ 10,000 is needed. This is often referred to as a "dead cat bounce" - implying that there are not enough buyers to bid higher and create a new higher high.
If such a sharp bounce occurs, a continuation of the decline is probable, which makes me target $ 8,750 as the next support area.
However, this move will leave CME gaps behind and will reduce the current structure of the market. The halving event is still approaching in about 3 months - events that tend to create a large rally.
As long as $ 9,400-9,450 is acting as a support, the trend is still bullish for Bitcon.
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Disclaimer: This article is an analysis by cryptocurrency analyst Michaël van de Poppe - a regular contributor to CoinTelegraph. Readers should only consult, do not consider this as an investment advice, especially from Toiyeubitcoin, we will not be responsible for your investment.
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According to CoinTelegraph
Translated by ToiYeuBitcoin