Bitcoin (BTC) and the crypto market have been accelerating heavily in recent weeks, as Bitcoin has surged by 60% from the July lows, while Ether (ETH) has been showing strength with a 90% rally as altcoins have been seeing massive gains across the board.
The general sentiment has flipped heavily as well. Three weeks ago, the majority of the people were discussing a potential breakdown to $20,000, including the effects of a death cross. But now, a golden cross could happen for Bitcoin, with a potential breakout above $48,000 certainly on the table.
Key resistance at $48K
The daily chart for Bitcoin gives us a ton of information. The market is approaching a substantial resistance zone, as the breakout above $48,000 would flag a bullish continuation and a potential test of the all-time highs.
Thus, the $48,000 region is a critical price point, as that was the support before the market started to spiral downward. Now, this resistance is receiving its first test, which will unlikely be passed on the first attempt.
On the other hand, the market has reversed the downtrend. Since the all-time high, lower highs were created as well as lower lows, signaling a bear market. This downtrend led to a more than 50% correction, leading to expectations of a prolonged bear market.
The recent run has negated this bearish argument, as a new higher high was established. Next to that, a new higher low was created, confirming the new direction.
Therefore, if the market can’t break above $48,000 in the coming weeks, the level to watch for support and, ultimately, the critical level to sustain this momentum is found around $37,500. Simply put, higher highs will be made if BTC manages to maintain above this level.
The last thing to note, however, is the potential bearish divergence. This isn’t confirmed but, given the recent weakness around the 200-daily moving average, a near-term correction is still likely as the market is approaching a higher timeframe resistance.
Total market cap facing final resistance zone
The total market capitalization of crypto broke through a resistance zone at $1.75 trillion. The next resistance zone is approaching, as the crucial breaker before the May meltdown was around $2 trillion.
A similar construction is found there for Bitcoin with the $48,000 level. So, an immediate breakout is also unlikely.
A higher low has to be established if the market rejects at $2 trillion. Similarly to Bitcoin’s $37,500 support level, the same can be said about $1.5 trillion for the total crypto market cap.
Altcoin market cap at risk of 25% correction?
The altcoin market cap shows a crucial resistance coming up at $1.15 trillion and also comparable to Bitcoin’s at $48,000. Similarly, a breakout upon the first attempt is unlikely and, therefore, some S/R ranging should be expected.
Bitcoin: Key levels to watch on lower time frames
The critical levels to hold for Bitcoin to avoid any breakdown are found in the $44,800-$45,100 range. That region has to sustain support to prevent a potential reversal. The critical resistance for Bitcoin’s price is found between $47,500 and $49,000. If that breaks, continuation to $55,000 is likely as well as, potentially, a new all-time high.
However, once a reversal takes place, many support levels are found for Bitcoin’s price. The first level of support is seen at $42,600, while the big support zone is found at $40,800.
Such a correction of 15% would be very healthy for the market and gives people the opportunity to reenter at slightly lower levels. However, Bitcoin’s price should stay above $37,500 to sustain the current bullish momentum of higher highs and higher lows.
If that isn’t possible, then the market may be in store for more blood.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.