Cryptocurrency market consolidates after reaching new ATH

Cryptocurrency market consolidates after reaching new ATH

The past week was a particularly successful one for cryptocurrencies. A fresh ATH on Bitcoin, largely driven by the debut of the Bitcoin ETF on the U.S. trading floor, pushed many coins higher. This was soon followed by declines to now keep the market in consolidation, ahead of a potential next breakout. So let’s take a look at what we can expect in the coming days.

Bitcoin on standby

The largest of the cryptocurrencies is definitely regaining supremacy and drawing worldwide attention. However, after breaking out a new ATH above the $67,000 level, we saw declines. This dragged down the altcoin market, which with a few exceptions suffered much more. When we go down to the 1-hour interval of the BTC/USD pair, we see a Head and Shoulders formation formed, the potential playing out of which could lead to declines as low as $53,000. However, given that we are in a bull market, it is important to keep in mind that bearish formations are often not played out. Instead, they are used for manipulation. This was the case this time as well. Bitcoin broke out of the pattern towards the bottom, but shortly after, the price returned to dynamic growth. This was a classic example of stop loss hunting. Meanwhile, on the daily interval we see some interesting facts.

The first is the bullish pennant formation, which in the vast majority of cases indicates a potential upward breakout. The 21-day exponential moving average, is now acting as support for the price, which is also a good sign. It is worth paying attention to the MACD, whose histogram is showing signs of turning back, suggesting potential upside. This is also confirmed by the Stochastic RSI, which speaks of a local oversold condition. These are key elements suggesting the need for an upward price breakout.  

Ethereum steps behind Bitcoin

In the previous analysis, we noted that there are signals indicating a correction on the Ether chart. Thus, the second largest cryptocurrency, after equaling its ATH, also experienced declines that eventually led it to consolidate in the area between $3,800 and $4,300.

It is important to note that the aforementioned consolidation takes place above the symmetrical triangle from which Ether has just broken out. Its upper edge has been successfully tested as a support so far. At the same time, we see a bullish divergence on RSI (yellow line), and similarly as in the case of Bitcoin, a local oversold on Stochastic RSI.

The MACD indicator on the surface does not look so friendly, but when we take a closer look at it, we can see that it is losing the momentum with which it was heading towards a bearish cross. The lines of the indicator currently overlap, and it is very likely that instead of crossing each other they will make a rebound, which may result in Ether continuing to follow Bitcoin’s movements, if it decides to grow.

The altcoin situation is not clear-cut

The Bitcoin dominance chart, from which we could usually tell the time when the altcoins would come to a head, becomes very interesting. The trendline we indicated, which has so far provided resistance to BTC dominance (white line), is still in play. The stochastic RSI indicates that bitcoin should regain its power and increase its strength over the altcoins. However, the MACD does not confirm this. Nor is it confirmed by the Bollinger Bands, where BTC has fallen below the level set by the 20-day moving average, under which, once it was there, it used to hold for an extended period. If bitcoin follows the new ATH, altcoins may well follow suit. This could mean that the psychological limit of 40% dominance of BTC will be broken soon.

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

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