The cryptocurrency market has been in an impressive bull run for the past month or so. Market buyers are firmly holding support levels and have cleared resistance areas on the way up. Little or no bearish reaction at key resistance levels clearly proves that demand for crypto is increasing dramatically.
When the entire cryptocurrency market crashed in the second quarter of 2021, the sentiment around the public crumbled. Some were bullish, expecting a V-shaped or W-shaped recovery, while others were still bearish, expecting the market to enter a downtrend, making lower lows and lower highs. Looking back, the previous analysis and anticipation seems to have played out as buyers have continued to push prices higher at every turn. Of course, the consolidation , especially in Bitcoin, lasted about three months, but the fact that the demand zone has remained continuous depicts strong signs of the existence of a buyer in the market.
On the altcoin front, the trajectory of most altcoins was out of sync with Bitcoin, but the overall movement was indeed correlated. During the entire recovery phase, altcoins were divided into all kinds of trends. Few altcoins jump up and even break above ATH; some are simply following bitcoin's price action, while the rest have not yet reached the recovery stage.
Bitcoin is testing the $50,000 resistance level
Volatility in Bitcoin has eased over the past few weeks as the consolidation around the $50,000 mark is slightly overextending. Sellers with potential resistance around this level try to push the market lower, but buyers absorb the discounts, preventing the price from falling further. Still, short-term bulls fail to break the $50,000 psychological barrier. However, when the market tests the $50,000 mark just once, it becomes uncertain to predict selling pressure at that level.
Is Profit Taking Hitting Bitcoin?
Optimism in bitcoin the most - finally is back with inch prices increasing every week. Since May, the range market has apparently shut down the entire cryptocurrency investment space as the percentage return in the short term has not exceeded 10%. However, as resistance at $ 40,000 began to weaken over time, fear began to fade and greed to emerge. As a result of excessive demand despite the presence of higher supply zones, prices rose, breaking through the main resistance and supply zones.
Technically speaking, the $40,000 price level was critical in the market as it was repelled even though buyers rallied strongly from the $30,000 support level. The price break above $ 40,000 was crucial, as bears at this level could potentially have sent the market into a downtrend if buyers had not reinforced prices higher. And buyers targeting the same support areas and eventually breaking support levels proved the existence of those buyers who took prices all the way to $ 60,000 before.
As can be seen from the diagram illustrated below the candlesticks on BTC vs USDT, prices have been heading north for the past five weeks with minimal retracement. But if we take a closer look at the three recent bullish (green) candles, it can be seen that the length of the candles is decreasing slightly as the price approaches the peaks on all times . This may just mean a loss of buyers' momentum, but if the same period is tested on a higher period, the bulls will certainly look strong enough. Thus, we base it on the general trend in such cases which clearly favors buyers.
Bitcoin Price Chart of the Week Time Frame | Source - BTC/USDT
Conclusion
The market is in a situation where it should be approached with the popular mantra - "The trend is your friend". The Bitcoin market once again proved resilient with the announcement, despite the major barriers surrounding it.
Every trending market has to go through correction . The recovery period is not an important factor that determines the strength of the trend. Instead, the momentum of buyers and sellers within a correction determines the period of the correction and future price action.
Now bitcoin struggling to push and break above the resistance level at the $49,300 level due to bear dominance in these areas. However, buyers preventing sellers from making a sequence of lower lows and lower highs clearly show the compelling interest of the bulls as well. In summary, the consolidation may last a bit longer until the sellers at the technical resistance level disappear completely.
Wait and watch the blog on KuCoin for po - interesting , educational and informative content. All the best!
Did you know that KuCoin offers premium TradingView charts to all its clients? With this, you can strengthen your technical analysis and easily identify different crypto chart patterns.
Register in KuCoin and start trading today!