Bitcoin (BTC) has been cooling its heels in the last couple of days, after being rejected at the very important level near $9,100. We have recently covered why this level is so important, and the shorthand is that it has the potential to define H1 of 2020 (at least). Now, the leading crypto looks likely to move again, as price completes a consolidation surrounding $8,600.
We start on the 4-hour chart, and see that price has been unable to break above the 21 EMA, or below the 55 EMA. Volume has dropped off to nearly nothing at time of writing, and this usually signals a move just around the corner.
Generally, it seems a bit more likely for price to break down from here. This is because the very short term trend has turned down; and because corrections usually come in three waves, only two of which seem to be complete here. We see the area just below the current consolidation price, starting at $8,460, which is a likely place for new support to be found.
The open question here, of course, is will the medium-term uptrend continue? We head to the daily, and first see the potential for a hidden bullish divergence – suggesting a continuation in the medium uptrend. The histogram has been trending up at a flat rate, but might only see a brief presence on the positive side.
Again, we see on the daily the general decline in volume that has come with rising prices during January. This itself suggests waning buy strength and a possible pullback. A pullback anywhere within the blue zone pictured would well preserve a medium-term uptrend and likely lead to another wave up.
The other big story with Bitcoin is its falling market dominance. We can see on the chart below that dominance is now carving through the key support zone of its recent chart, from mid-2019. Once 65% is lost, we are unlikely to see Bitcoin dominance regain the lofty levels near 70% anytime soon (if ever!).
Meanwhile, the rest of the crypto market is clearly taking the inverse track, eating Bitcoin’s losses with a near-perfect symmetry. This suggests that altcoins may continue to recover and do well in 2020.
Bitcoin is still grappling with the uber-important $9,100 level. A retracement here followed by another attempt may yield a break. The leading crypto has not yet been soundly rejected from this level, but the rest of this week could well yield a decision.
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