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Analysis: Bitcoin Broke Major Resistance: Consolidation Now Anticipated

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From yesterday’s low at around $146B the evaluation of the cryptocurrency market cap has increased by over 17,5 billion dollars as it came up to $163,653,743,177 to its highest point today which is currently being made. The evaluation is still in an upward trajectory as a breakout to the upside from the major resistance point has been made.

Bitcoin Price BTC

Looking at the global chart you can see that the momentum behind the breakout is strong as the majority of the increase occurred in a matter of hours today from $147,7B.

The market is today in green with an average percentage of change ranging around 12%. The biggest gainer is Bitcoin among the major cryptos with an increase of over 20% today, although some of the cryptos with a lesser market capitalization increased more like Metaverse ETP who experienced an increase of over 33% and the biggest gainer among the top 100 is REPO with an increase of 132.65%.

Bitcoin’s market dominance has also been increasing as the majority of the capital flowing into Bitcoin which is why it has increased in marked dominance from 50.17% at its lowest point today to 52.18% at its highest.

BTC/USD

From yesterday’s open at $4163 the price of Bitcoin has increased by 22.7% today measured to the highest point the price has been which is at $5108. The price is currently sitting at around $4795 as the price has started pulling back.

On the hourly chart, you can see that the price came to the descending trendline on Saturday when the interaction has been made after which a minor retracement occurred to the 0.786 Fibonacci level where the price found support on a quick spike as it came back to the significant resistance level and was hovering around before finally going above it slightly, retested it from the upside after which strong momentum was shown to the upside as the price increased impulsively and parabolically.

I was expecting that the interaction with the significant resistance level would end as a rejection with the price going down first to establish support on the lower ascending trendline around $3666 before we see a breakout to the upside but instead, the price continued moving to the upside and has managed to break major key resistance levels along the way.

This bullish momentum could be the continuation of the Intermediate Y wave and as the price spiked to just little over $5100 and retraced by around 7% after we are now seeing the first signs of the momentum slowing down. From today’s highest point the price has retraced by 7.48% but has started increasing again and is currently 5.25% lower than on its highest point which could be an early indication that the momentum would continue.

As the price has increased exponentially we are now most likely to see consolidation above the 1.272 Fibonacci level which will now most likely get tested for support.

Looking at the 4-hour chart we can see that the major resistance at $4300 has been broken as long as other significant resistance points to the upside. As the price reached the 1.618 Fibonacci level a pullback started so now we are to see if the increase continues or would the price start moving back below the significant resistance again.

Considering that from the 15th of December when the price of Bitcoin started entering the bullish period this structure looks corrective as prior to it the price of Bitcoin almost halved in value – dropping from around $6500 level to below $3300. The increase we have seen today was expected to occur after more interaction with some of the significant support levels so it is hard to say where it should be incorporated but I still think that we are seeing the development of the corrective Intermediate wave Y.

As consolidation is now awaited we are going to see from the depth of the pullback and the momentum behind the increase if the projection will get invalidated, but although we have seen a significant increase it could still be corrective.

Market sentiment 

Bitcoin’s hourly chart technicals are signaling a buy.

Pivot points

S3 3162.2
S2 3605.2
S1 3886.3
P 4048.2
R1 4329.3
R2 4491.2
R3 4934.2

Conclusion

The price of Bitcoin has increased by over 22% today and a breakout to the upside occurred unlike I was expecting.

This price action development is most likely a result of the positive sentiment surrounding the cryptocurrency market from 15th of December when it began but I still believe that this increase is correctional and could continue for much further potentially retesting the broken horizontal support level around $6500 before the price of Bitcoin is headed for further downside.

In either way, since the price increased exponentially we are now most likely going to see some consolidation before further increase so depending on the shown momentum and the depth of the pullback we are to reevaluate the potentially possibilities.

The post Analysis: Bitcoin Broke Major Resistance: Consolidation Now Anticipated appeared first on Blockonomi.

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