- Bitcoin is stuck in a channel between $60,000 and $64,000
- How it exits this channel will go a long way to dictating the start to November
- Alts have been reclaiming some dominance
Bitcoin is back in a channel, this time between $60,000-$64,000, leaving alts to make hay while Bitcoin consolidates. What levels should we be looking for when Bitcoin does break out, and what can we expect from alts in the mean time?
Bitcoin entered its current channel around a week ago when it fell from $65,000 to $62,000, since when it has bounced multiple times at the $60,000 level:
Bitcoin has also seen two very clear rejections at the $64,000 level, leaving us looking at this picture and waiting for it to resolve itself. A period of consolidation after the rush to $67,000 is expected, but what can we expect now? Bulls will be hoping that Bitcoin can break through the $64,000 barrier and flip it to support which will lead most likely to immediate continuation of an upward trend:
On the downside, if Bitcoin falls through the bottom of the range its next move will be important. If it wicks and bounces back up into the channel then that’s no cause for alarm, but if the current $60,000 floor acts as a ceiling then further downside to the mid $50,000s is expected:
The question is, which outcome is more likely? The fact that Bitcoin has now put in a lower low and a lower high since hitting $67,000 is a concern, and it is hard to look past the Bitcoin futures ETF listing acting as a local top. What we can see however is that there has been strong interest in buying Bitcoin at the $60,000 level, although buyers have dried up a little of late. The longer Bitcoin remains in the channel and doesn’t break down, the more chance there is of the exit being positive rather than negative.
Alts meanwhile have been using Bitcoin’s position to make serious gains. As usual we can use the ETH/BTC as a bellwether of alts strength, which, as we can see, has broken a seven-week downtrend:
If ETH can overcome resistance at the current level of 0.07 then alts could be in for another run – assuming that Bitcoin behaves and doesn’t break out of its channel in the meantime. This is reflected on the Bitcoin dominance chart which has seen a clear rejection at resistance:
Bitcoin dominance is in a very similar position as Bitcoin itself, trapped in its own range since May and at a crucial point in the cycle. If Bitcoin dominance turns this current level into support then we can expect a break through the 49% resistance level through the rest of Q4. Conversely if it continues its collapse back to 40% there is every chance that, at the third time of asking, it simply ploughs straight through, which would be an incredible citation for alt holders to be in.
As we said, everything depends on how Bitcoin exits its channel, so set your alerts and have plans for both outcomes.