Bitcoin’s huge rally took it over $11,400 this week, setting crypto Twitter ablaze with rocket emojis and six figure predictions. Following its huge move however, what is a more likely proposition is a period of rest and ranging, possibly with further dips lower, which would allow big cap alts room to run.
Bitcoin Establishes a Range
Since Bitcoin’s mammoth run to $11,400 it has consolidated in a range between $10,700 and $11,200:
Were Bitcoin to have the legs to break through the $11,200 area with volume then we would be looking towards the CME gap of $11,795 as the next resistance. Dropping underneath $10,700 would not be concerning in any way – in fact it is much more likely than a push through. A period of further consolidation, often at lower levels than Bitcoin is currently displaying, is to be expected after such a volatile move.
Bitcoin has already dipped back to $10,600 which might end up proving to be the dip, but something closer to the $10,000 level over a period of weeks is to be anticipated before Bitcoin looks for the next leg up. Anything down to this level is perfectly fine, although a drop and daily close below the recently crossed line of resistance would be problematic:
Alts Look to Make Hay While Bitcoin Rests
The ideal scenario for traders would be a period of consolidation around the $11,000 mark for Bitcoin, which would allow profits to move into big cap alts, which they have already started doing:
Should Bitcoin indeed take a breather after its huge move this week we should see more of the same action, with ETH, XRP, and LTC in particular set to make big gains against Bitcoin before the king, hopefully, makes a further push upwards. LTC in particular looks well set up for a big move:
Of course it is impossible to discount Bitcoin making that next leg up, especially with a coronavirus second wave imminent in Europe and the U.S. about to go on another money printing splurge which could send the U.S. Dollar Index down again.
