The Bitcoin (BTC) price kicked off in 2020 with a staggering 37% increase in January. Besides, BTC found support at $ 8,200 earlier this week. The test of this support level has continued to increase momentum, thereby pushing prices up to 9,500 USD.
Is Bitcoin price ready to face $ 10,000?
Bitcoin showed strong month candles in January
Bitcoin's monthly candle closed yesterday – something that could only give a bullish conclusion. A potential new uptrend has started, as buyers joined in January at each price test of resistance / support.
However, is it all sunlight and rainbow at the moment? Not entirely so. Bitcoin's price has now moved to the next resistance level and this can be interpreted as a major hurdle, as shown in the following chart.
The resistance at $ 9,500 is huge, as the price has been bounced multiple times each time it reached this level during the summer of 2019. If BTC can break this resistance up, the next target could be towards $ 10,900. and that will also smash the psychological barrier at $ 10,000.
Total market capitalization broke a major resistance
The total market capitalization of all cryptocurrencies is showing a clear test with a support of $ 215 billion – this is essential. After that, the market capitalization increased sharply towards other major resistances. This resistance is found at $ 240-250 billion and is comparable to $ 9,500 for Bitcoin.
However, there is a difference here. Total market capitalization broke above these resistances and turned them into support. Does this imply that altcoins are outperforming Bitcoin?
It should be noted that there is also a possibility of a discount that can be seen on the chart. If total market capitalization drops below $ 240 billion, then the potential reduction divergence will become a real bearish period. If this happens, another test of $ 215 billion (blue trend line) may come later.
Market cap Altcoin breaks the $ 80 billion barrier
Altcoin market capitalization is showing a chart similar to the total market capitalization of cryptocurrencies. The key level was 80 billion USD was broken, then consolidation has begun.
Similar perceptions are raised for the altcoin market capitalization chart. If the altcoin cap drops below $ 80 billion again, a bearish divergence will be confirmed and a retest of $ 72 and $ 65 billion is probable.
However, on the positive side, if USD 80 billion is kept as a support, the next target will be USD 100 billion, which is also the next resistance level.
Bitcoin's dominance index remains below 68%.
Bitcoin's dominance chart has not changed in recent weeks as major altcoins are still facing major resistance levels. Currently, the prominent examples will be XRP and Ether (ETH). XRP needs to break the 2-year downtrend, while ETH needs to break above 0.02 satoshi to continue climbing higher.
If either of these moves occurs, Bitcoin's dominance is likely to continue the downtrend. However, if Bitcoin itself starts rising above $ 9,500, a sell-off for altcoins is understandable. Such sell-offs frequently occur when Bitcoin's volatility increases.
The main indicator for altcoin is Ether – also broke the 7-month downtrend, as seen in the chart above.
Recently, the price of ETH found support at $ 157 (green area) and continues to rise. A similar flip of support into support occurred at $ 173 – which makes me believe that the price is likely towards $ 195 and $ 230.
Since many charts are showing potential bearish divergences, a break below ETH's $ 173 level usually means the price will retest the $ 157 – $ 162 level before continuing the upside. The main indicator for the trend is still found at higher peaks and higher lows. If the ETH price drops below $ 157, then the cryptocurrency market is in trouble.
Price increase scenario for Bitcoin
The uptrend scenario is the main scenario at the moment, as the trend is up after breaking the downtrend for 7 months.
Key levels to track are $ 9,000 and $ 9,500. The reason for $ 9,000 is because prices can retest support before continuing to rise above $ 9,500. A retest of $ 8,750 and $ 9,000 is still beneficial to the market structure, as the price of Bitcoin will still create a higher bottom.
A decisive break above $ 9,500 will show a breakout above the major resistance, as mentioned above.
If the price breaks above this resistance, the next targets will be found at $ 10,500 and $ 10,900. I don't see $ 10,000 as a resistance beyond the fact that circular numbers often act as psychological barriers.
Discount script for Bitcoin
A bearish scenario will become clear if Bitcoin loses support of $ 8,200. Dropping below this level will signal that the momentum of the higher bottom has vanished and further downward pressure is feasible.
So, what signals should traders look for to determine that Bitcoin has become bearish? If the price retests at $ 8,750, the bounce must be large enough to surpass $ 9,000. However, if resistance is found immediately and the price creates a lower high then further declines are warranted.
But, first, prices need to touch these levels to see how traders and investors react. The momentum has now increased, and when Bitcoin price breaks above $ 10,000, FOMO can start to move. Especially when halving is only 100 days away.
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Disclaimer: This article is an analysis by cryptocurrency analyst Michaël van de Poppe – a regular contributor to CoinTelegraph. Readers should only consult, not consider this as an investment advice, especially from Toiyeubitcoin, we will not be responsible for your investment.
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