Bitcoin Leads the Charge…but Where Next for the Market?

Reading Time: 2 minutes

Bitcoin’s sudden $1,000 burst yesterday caught almost everyone by surprise and led to a huge uptick in almost every single cryptocurrency. Many expected Bitcoin to pull back to the $4,500 level or lower after its mammoth run, but not only did it refuse to drop that low it has actually kicked on the twenty-four hours since, knocking on the door of $5,000 before being rejected and settling just below. This is an extremely healthy sign, at least in the short term, although calls of a bull trap have already begun to emerge. After this mega move, what’s next for the crypto markets?

Bitcoin Still Calling the Shots

Yesterday’s action led to $25 billion being added to the ecosystem, and it didn’t take long for it to filter down to altcoins, with BCH seeing a near 50% rise, closely followed by a huge swathe of alts such as REP, ETP, DOGE, and BSV. While it may be tempting to load up on alts now, caution may have to be exercised to see what BTC does next. $5,500 is the next real level of resistance, but a pullback still wouldn’t be unexpected after such a meteoric rise, even if it is delayed.

A dip below the former resistance of $4,200 may spell trouble and would send fear through the market, but anything above that could be considered positive and would likely be the precursor to more upwards momentum. We all know by now that a BTC move either way can wreck altcoin positions, so it may be worth keeping an eye on what BTC does for the next twenty-four hours before looking for alt setups.

Are the Bears Really Gone?

Not everyone is entirely positive on the recent upwards move, but at this stage it’s too early to tell if this is the end of the longest bear market in Bitcoin’s history, or simply an injection of false hope before new yearly lows are experienced. The euphoria that yesterday brought with it was at the same time expected and troubling, given what euphoria tends to lead to in markets. However, a small dose of euphoria at the tail end of an excruciating bear market is very different to the kind that’s around at the peak of a bull market. In the short term, the fact that BTC settled near $5,000 is very good news, but the fragility that still exists in the market means that equally big drops can’t be ruled out yet.