Bought the Dip? Bitcoin Price Rebounds Strongly With $11,000 in Sight
Bitcoin (BTC) price made a small correction yesterday as it dropped from $10,100 towards $9,800. However, today’s bullish momentum returned and the price bounced back above $10,000 to make a new 2020 high at $10,370.
So is the continuation of bullish momentum likely? Let’s look at the charts to see what could occur next.
Crypto market daily performance. Source: Coin360
Bitcoin finds support at $9,800 and continues upwards
BTC USDT 12-hour chart. Source: TradingView
Many Bitcoin traders were waiting for the price to drop to the support at $9,500 but this was not to be. Instead of dropping further, the price stabilized at the $9,750 level and continued its upward momentum.
Does this mean that continuation is likely? The current price action still looks slightly and Bitcoin didn’t break above the next massive resistance.
Nevertheless, it’s a great sign that the $9,500 level was cleared as that was a significant resistance for upwards continuation. However, the next hurdle is the $10,400 area where Bitcoin currently finds resistance.
Through that, a range is defined, which is found in the following chart.
BTC USDT 12-hour chart. Source: TradingView
The range is defined by the resistance at $10,400 and the possible lower support zones at $9,500 and $9,800. If the price can’t break the $10,400 area then it will then likely pull back to retest this area.
Such a test would also mean that the price is going to consolidate for a while. Consolidation at this level would imply re-accumulation before the continuation of the upward trend.
If the price of Bitcoin can break through $10,400, the next resistances are found at $10,900 and $11,600-11,900 where there is also an open CME gap.
Total market capitalization shows strength
The total market capitalization still provides a brighter view than the Bitcoin chart alone.
Total market capitalization cryptocurrency 12-hour chart. Source: TradingView
The chart is showing a clear support/resistance flip at $245 billion, after which the market capitalization continued to rally upwards. The next target area is found at $285 billion and $300 billion.
A retest of $260 billion was likely to occur, but the market didn’t give such a retest as $275 billion became support.
This gives the impression that continuation towards $300 billion is warranted, which would then be tested as the next resistance level.
Altcoin market fights the $100 billion barrier
Total altcoin market capitalization cryptocurrency 12-hour chart. Source: TradingView
The total altcoin market capitalization is still testing the next resistance. The chart clearly shows a breakthrough of the $80 billion, after which the breakthrough was confirmed by the support.
The market capitalization of altcoins is currently testing this massive resistance. A breakthrough of this level would warrant a continuation of $112 and $133 billion.
However, the upwards move looks a bit overextended and a possible bearish divergence is currently appearing. If confirmed, this would imply that some retests of the lower levels at the $92 billion level are likely before continuation upwards can occur. A test of the $80 billion levels would still be a good sign of overall upward momentum.
The market is giving several bullish scenarios, and two will be discussed in this section.
BTC USDT bullish scenario 1. Source: TradingView
The most appealing bullish scenario would still indicate some consolidation before continuation. The key factor for such a consolidation would be the confirmation of resistance at $10,400.
Such a test is likely to occur in the coming 24 hours. If the price of Bitcoin can’t break through this resistance, it’s expected that some retests of the $9,500 and $9,800 level will happen before continuation upwards.
If support is found at $9,500 or $9,800, the market is basically making another higher low which indicates that incoming buying pressure will lead to the resistance being tested again.
A breakthrough of the $10,400 level would open the door for continuation to $10,900 and possibly the $11,600-11,900 zone.
The second scenario consists of a breakthrough of the $10,400 already within the next 24 hours.
BTC USDT bullish scenario 2. Source: TradingView
If such a bullish breakout occurs, continuation towards the stated targets is on the tables. The first resistance is at $10,900, the second is found at $11,600-11,900.
BTC USDT bearish scenario. Source: TradingView
There’s not a strong reason to be bearish at this point, given that the trend is upwards and not showing any weakness. We could see some bearish momentum in the coming period, but some important things have to occur in order for investors’ perspectives to flip bearish.
The price has to start off with rejection at $10,400, after which a retest of the $9,500 is warranted. However, if the price of Bitcoin can’t make a higher high after that (for example, a bearish retest at $9,800), continuation downwards is likely to occur with targets near $8,800 next.
Nevertheless, the current trend is strong, so the bullish scenarios are more likely at this point. As long as Bitcoin finds support at $9,500 or $9,800, continuation to the upside is more likely to occur than downwards pressure.
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.