Bitcoin (BTC) and the crypto market have accelerated sharply in recent weeks, as Bitcoin is up 60% from July lows, while Ether (ETH) has shown strength with a 90% rally as altcoins saw massive gains everywhere The whiteboard.
The general mood has also changed significantly. Three weeks ago, the majority of people discussed a potential collapse to $ 20,000, including the effects of a death cross. But now a golden cross could happen for Bitcoin, with a possible breakout above $ 48,000 that is certainly on the table.
Key resistance at $ 48K
BTC / USD 1-day chart. Source: TradingView
The daily chart for Bitcoin gives us a lot of information. The market is approaching a significant area of resistance as the breakout above $ 48,000 would indicate a bullish continuation and a potential test of all-time highs.
As such, the USD 48,000 region is a critical price point as it was the support before the market began to turn down. Now this resistor is given its first test, which is likely to fail the first time.
On the other hand, the market has reversed the downtrend. Both lower highs and lower lows have been made since the all-time high, suggesting a bear market. This downtrend resulted in a correction of more than 50% which resulted in a prolonged bear market.
The most recent run shattered that bearish argument as a new higher high was noted. Alongside this, a new higher low was created confirming the new direction.
If the market fails to break above $ 48,000 in the coming weeks, the level to look for support and ultimately the critical level to maintain this momentum is $ 37,500. Simply put, higher highs are made when BTC manages to stay above that level.
The last thing to watch out for, however, is the potential bearish divergence. This is not confirmed, but given recent weakness around the 200-day moving average, a near-term correction is still likely as the market approaches higher timeframe resistance.
Total market capitalization versus the last resistance zone
Total Crypto Market Cap 1-Day Chart. Source: TradingView
The total market cap of crypto broke a resistance zone of $ 1.75 trillion. The next zone of resistance is drawing closer as the key breakout prior to the meltdown in May came in at around $ 2 trillion.
A similar construction can be found there for Bitcoin at the level of $ 48,000. An immediate outbreak is also unlikely.
A higher low needs to be set if the market declines at $ 2 trillion. Similar to Bitcoin’s support level of $ 37,500, the total crypto market cap can be said to be about $ 1.5 trillion.
Altcoin market capitalization at risk of 25 percent correction?
Total Altcoin Market Cap 1-Day Chart. Source: TradingView
Altcoin market cap shows a crucial resistance at $ 1.15 trillion and is also comparable to that of Bitcoin at $ 48,000. An outbreak on the first attempt is also unlikely and therefore a certain S / R range is to be expected.
Bitcoin: Important Levels to Watch for in Shorter Time Frames
BTC / USD 4-hour chart. Source: TradingView
The critical levels that Bitcoin must hold to avoid collapse are in the $ 44,800 to $ 45,100 range. This region must maintain support to prevent a possible turnaround. The critical resistance for the price of Bitcoin is between $ 47,500 and $ 49,000. If it breaks it is likely to continue to $ 55,000 and possibly a new all-time high.
However, once a reversal occurs, many levels of support for the price of Bitcoin will be found. The first level of support is at $ 42,600 while the large support zone is at $ 40,800.
Such a correction of 15% would be very healthy for the market and give people the opportunity to get back in at a slightly lower level. Bitcoin’s price should stay above $ 37,500, however, to maintain the current upward momentum with higher highs and higher lows.
If that is not possible, the market may be ready for more blood.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement carries risks. You should do your own research when making a decision.