WEEKLY ANALYSIS (SEPT 7–14)
After Bakkt tweeted their opening a week ago the price dropped down from the resistance zone around $10,900 towards $10,200. However, the price dropped down a bit more towards the support zone of $9,900–10,000 but then surged towards $10,200. Last week, Bitcoin held the key support area at $10,000 after the week started at $10,500. However, there is a bullish trend line forming with support near $10,140 on the 4-hours chart of the BTC/USD pair (data from Bitstamp). The market appears to hold this support for the coming week as the bullish army in the market is still holding the grounds. It doesn’t look like a distant point when Bitcoin will start trading near $11,000. Moreover, there was a break above the $10,800 level and the 100 simple moving average (4-hours). However, the price failed to continue higher and topped below the $11,000 resistance, the weekly percentage difference wasn’t significant.
Only analysing the upsides, a fresh decline started after the price went through a wing high touching $10,954. It broke the key $10,500 support area and the 100 SMA. The price slightly spiked below the $10,000 support area but evidently, a swing low was formed near $9,903 and the price started correcting itself. The 23.6% Fib retracement level was worth witnessing as it broke past the last decline from the $10,954 high to $9,903 low. The upward run is still facing impediments near the $10,400 and $10,500 levels as the prices face strong restrictions near this range. Additionally, the price is also struggling to climb above the 50% Fib retracement level of the last decline from the $10,954 high to $9,903 low (same as 23.6%). If Bitcoin manages to break its chains and break above the $10,450 and $10,500 levels, the price could continue to rise. The next key resistance is near the $10,800 level.
On the downside, there are market is holding with $10,100 and $10,000 resistance levels with all its strength. Additionally, there is a major bullish trend line forming with support near $10,140 on the 4-hours chart of the BTC/USD pair. If there is a downside break below the trend line and the $10,000 support, the price could resume its decline. The price seems to be consolidating in a contracting range below the $10,500 resistance. It might soon break the $10,500 resistance and continue higher but this statement can’t be affirmed with strong convictions as the bearish participants are producing equal resilience. Conversely, a downside break below $10,000 could start a strong decline in the coming sessions but we believe Bitcoin can hold the $10,000 surface. Meanwhile, the existing positive divergence is good enough to sustain Bitcoin above the short-term 50 SMA support. Apart from the SMAs support, Bitcoin would find cushion at $10,200, $10,000 and $9,800 in the event a reversal occurs.
Looking at the Technicals (RSI and MACD), Bitcoin will likely consolidate between $10,300 and $10,400 in the coming sessions. The sideways trend observed with Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) proves this range. Following another failed tryout to break above the 54–55 level, the RSI is now facing the significant 50 level. Overall, there’s a bit of bullish divergence in the RSI, but for this to be considered, the indicator needs to overcome 55.
Considering the complete cryptocurrency market, it’s necessary to analyze the total market capitalization of the crypto market as well. Though the Bitcoin chart is giving a bearish view through the descending triangle perspective, the overall market cap also showed its correlations with the Bitcoin. Other than Binance, BitcoinSC, and Monero, traders traded on top altcoins bullishly.
On the contrary, looking at the complete market capitalization, it wasn’t remarkably bullish. The low marketcap altcoins weren’t as strongly correlated with Bitcoin as the top 10 cryptocurrencies. Excluding the Bitcoin’s market cap from the figures, the altcoin market cap broke upwards above $62–66 billion and currently testing whether this level can become support again. If the market is able to break upwards, the altcoin market could then target $125 and potentially $250 billion, switching the whole sentiment from ultra bearish (depression levels) towards disbelief and bullish. Hence in the next week, the price of the market will strongly depend upon which side of the market (Bitcoin or Altcoin) stays bullish. If the Relative Strength Index (RSI) and dominance chart will not show any confirmation next week, a new rally in dominance is still in the cards. The target for a bullish push in the dominance index could easily reach 75–80% (unlikely but possible).