The price of bitcoin has managed to hold the $17,200 support zone which puts its all-time high once more within reach. Since September, BTC has experienced massive growth, with its price rising from $10,500 to $18,400. That is a rally of approximately 75% in less than three months.
Moreover, since March bitcoin has gained around 400% which makes it the best-performing asset of 2021 and might catch many investors flat-footed. Here are some charts to determine where the crypto might move to next. Many analysts and investors now wonder whether a reversal should be expected in the short term.
Bitcoin hits 1.618 Fibonacci
Based on the weekly chart, there is a massive run in the past period as the zone around the all-time high is being tapped. A strong resistance zone is marked around the all-time high price of bitcoin and may serve as a trigger for many of the investors to take some profits off the active market.
Notably, it is important to note that the 1.618 Fibonacci extension was breached. The Fibonacci tool is a powerful market indicator that marks the potential tops and bottoms and the 1.618 level is somehow the most substantial.
For now, there are many arguments for a possible correction which includes the Fear & Greed Index that is nearing record highs.
There are many key price levels to watch if bitcoin corrects before it reaches $20K. The first level that traders need to watch keenly is $16,000, the next support levels that might hold are located at $13,500 and $11,600.
Market Cap Reaches $500 Billion
The cumulative market capitalization of cryptos has surged to the next level and final resistance zone before a probable new all-time high; $500 billion might prove to be a major hurdle to overcome.
Interestingly, BTC’s price now just about 10% below its all-time high and has so far broken its all-time high market capitalization.
In the meantime, the cumulative crypto market cap is still down about 35% from its all-time high. It shows that BTC is currently in the spotlight. Altcoins might start to catch up later on.
Nevertheless, if the crypto market begins to correct, the most probable zone for a support/resistance (S/R) flip is roughly $380-400 billion. That level is yet to get backtested yet as an S/R flip here might certainly turn into a bullish sign for more upside.
Such S/R flips are normal in bull markets and quite healthy for underpinning the general uptrend.
Will BTC Dominance Peak In December?
Historical data tells a lot of information about market cycles. Until today, Q4 2021 is showing many signs that are almost the same as those that came up in previous years. One of these signals is the increase of BTC dominance over the past weeks, which has surged to over 66%.
Provided that bitcoin is in the limelight, altcoins might not perform well. In the scenario that bitcoin corrects, then altcoins might drop even further.
Nevertheless, the moment for altcoins to take over the crypto markets might be coming closer. The primary indicator to watch out for is the strength of Ethereum (ETH) price against Bitcoin and whether ETH/BTC has already bottomed.
The best conditions for altcoins are a slow, upward movement in the BTC price. Once that happens, most probably in Q1 2021, a powerful impulse move might then cause a spike in the prices of altcoins in general.