- The crypto market is approaching a crucial area of resistance following Bitcoin’s rise from $17,000
- The next test is the support that survived all the crypto contagion events but was eventually sunk by FTX
- The rally could take Bitcoin as high as $18,500
Bitcoin enjoyed a weekend pump to take it up to $17,400 and edge the total crypto market towards a key level of resistance. How it performs here will give us a true indication of what’s to come in this bear market rally, whether we can expect more or whether things are as good as they will get.
All Eyes on $850 Million
As we can see from this total market cap chart, Bitcoin’s bounce has helped the value of the market bounce from support at around $740 million:
The next resistance, at $850 million, is approaching fast and is a very important level, as it will help us know exactly where we are in the bear market. If, as expected, Bitcoin treats this as resistance then we could see the following price action take place:
This would be a typical bear market move, with a lower high followed by a lower low and may well act as the final capitulation before a bottoming structure can form. If on the other hand Bitcoin can flip this level and treat it as support, we could see something like this play out:
This isn’t, of course, enough to suggest that Bitcoin’s bear market is done with an a bull market is on the horizon, but it does indicate that there is enough strength for a typical bear market rally, which in Bitcoin’s case could take it as high as $24,500 before we fall back down to equal or fresh lows:
Those who were around in 2019 will know just how high a bear market rally can go, and how it can disappear just as everyone is thinking that the worst is over. That rally was driven by fundamentals however, with China’s public acceptance of blockchain technology, but with sentiment poor both within and outside of Bitcoin, we can expect this to be a short term rally before a return to the lows.
