Bitcoin (BTC) is currently in a price discovery phase and may head higher. However, a drop to the $18,500 zone in the near term should not be ruled out. In the last few months, BTC has seen a major rally. The flagship crypto accelerated from $10,000 to reach recent all-time highs above $24,100. That is a 140% rally in a few months.
For now, it is speculative to determine where the BTC price will head from here. Nonetheless, various levels must remain strong for the rally to continue. Moreover, multiple indicators can be critical for analyzing different charts and projecting possible areas of interest in price discovery.
Continuation To $25,800 Is Possible
The bitcoin daily chart shows a major breakout above the $19,500 level. That rally led to a temporary top of $24,100 but it automatically flipped the $19,500 zone into a crucial level to hold.
Also, this chart shows a major support/resistance flip of the $16,000 zone which resulted in massive upwards pressure that caused the breakout. Basing this analysis on the daily charts, the recent higher low has formed around $17,500. Provided that bitcoin sustains its momentum above that zone, the uptrend is intact and a continuation of gains is possible.
The Fibonacci extension tool is important to define the possible short-term top of the rally. For now, the first Fibonacci level is the 1.618 Fibonacci extension at $22,100. That zone has already been surpassed. It means that the market is currently experiencing intensive amounts of buy pressure.
The next level of interest for bitcoin is located at $25,800, the 2.618 Fibonacci level. That zone could be the next marker for a possible top. These vertical rallies are not sustainable for long. Therefore, a correction might happen at some point. Nonetheless, projecting when that may happen is anybody’s guess as BTC may easily and rapidly explode to $30,000 and then experience a 30% correction.
Total Market Cap Still Surging
The cumulative market capitalization of the crypto sector represents a major upside breakout in the past months. That is mainly fueled by bitcoin surging to its new all-time highs. While following bitcoin’s footsteps, the total market capitalization is now getting to the final hurdle before it goes into price discovery.
Just like bitcoin, there are critical levels to watch for a possible correction. The first is located around $550 billion, which may serve as support for the pullback. If that zone does not hold, the next strong supports are located around $435-$445 billion and $380 billion.
Are Altcoins Finally Awake?
Based on historical data, bitcoin dominance tops out in December after which a strong quarter begins for the altcoins. Bitcoin has to correct and stabilize for the altcoins to have such a strong quarter. As bitcoin corrects, the altcoins act in and push the crypto market higher.
Hence, based on historical data, the next quarter may be a considerable quarter for the altcoins.
Bitcoin Short-Term Outlook
The weekly bitcoin chart shows a major vertical run in the past months, which often ends in a huge correction just like it happened three years ago.
As highlighted already, nobody is aware of when the huge pullback will happen. Bitcoin might continue surging toward $30,000 before it starts correcting. Nevertheless, the primary level to watch in this incident of correction is the zone around $18,500, as the chart indicates.
Provided that this level holds, both bitcoin and all the other cryptos may keep soaring with the total cryptocurrency market capitalization going into price discovery just like it is the case with bitcoin.