Bitcoin is rebounding from last week’s lows and is nearing $60,000 once again.
The price of Bitcoin (BTC) saw a correction in the run-up to the record options expiry last Friday. However, nothing happened despite some expecting a massive move on the same day. The actual correction occurred before the event. On the day itself, Bitcoin’s price has bottomed out and began to rally.
The ongoing rally above $59,000 is being fueled by bullish news from Visa and PayPal as both are getting into Bitcoin and cryptocurrency payments. Put differently, the market is very much in the middle of the bull cycle and any correction is a blessing to traders and investors.
Critical support zone holds for more upside
As the chart above shows, the critical support area between $49,500 and $51,000 was just tested last week. Since the support held, another higher low was made, resulting in renewed upward momentum, which is playing out this wee.
The entire structure since September is massively bullish when the market broke above $12,000 and started to accelerate. The previous higher low was made at $42,000, which then became the critical support area to hold. As Bitcoin’s price didn’t even need such a heavy correction this time around, the recent low at $49,500-$51,000 can be classified as the new higher low.
Therefore, the next points of interest can be made through the Fibonacci extension, where $73,000 and $92,000 become the next points of interest if Bitcoin’s price breaks above the current all-time high at around $61,000.
The total market cap looks bullish
The total market capitalization shows a similar support test as the $1.5 trillion levels were critical to hold.
Since the total market cap of crypto survived that correction, more upside is very likely as the all-time high regions will be tested.
If further strength is being demonstrated, the next points of interest for the total market cap can be found at $2.2 trillion, which is also confirmed by the Fibonacci extension.
Bitcoin dominance chart approaches a critical zone
The dominance chart of Bitcoin shows a critical breaker for more downside. If the dominance drops below 60%, an assumption can be made that a sharp drop will occur toward 50%.
That’s not unlikely to happen since the summer period is often very favorable for altcoins. 2020 saw big rallies during this period, and investors remember the summer of 2017.
History may certainly repeat once more as many altcoin charts are looking bullish for breakouts against Bitcoin. Therefore, for alt season to happen, the price of Bitcoin must be relatively stable or slowly grind upward, which is currently the case.
A possible scenario for Bitcoin
The 4-hour chart of Bitcoin shows a clear uptrend since its recent bottom at $50,000.
However, several critical support levels are being established during this rebound. Right now, the important area to hold is $56,000. As long as that region maintains support, more upside is likely for the market. This puts new all-time highs and potentially $73,000 on the table.
On the upside, the critical area to break is shown by the red box, specifically $59,000-$60,000. Until then, altcoins will probably continue to gain momentum, and even if Bitcoin makes new all-time highs, altcoins will most likely follow suit.
by Michaël van de Poppe