Bitcoin continues to be bullish this week and is currently trading only about 4 percent below its all-time high. Meanwhile, the increasing strength of many old coins is causing a significant decline in BTC dominance.
Bitcoin (BTC): The all-time high is within reach
- BTC price: US$ 19,227 (previous week: US$ 18,254)
- Resistance/Targets: US$ 19,485, US$ 19,884, US$ 20,089, US$ 21,113, US$ 23,887, US$ 26,664
- Support: US$ 18,630, US$ 17,845, US$ 17,185, US$ 16,500, US$ 16,267, US$ 15,798 US$ 14,805
The leading currency is able to maintain its bullish trend this week, rising by around 6 percentage points on a weekly basis. Thus, depending on the stock exchange, the BTC price is still three or 4.5 per cent short of its all-time high. There is still no sign of weakness in the share price. Bitcoin can now generate a new all-time high at any time. It will be exciting to see whether investors will again cash in after the price has fallen from its then all-time high in 2017 or whether there will be a dynamic breakout attempt. Investors should also bear in mind that in the past, the old coins also rose significantly as soon as Bitcoin reached a new all-time high. The approaching all-time high for Bitcoin goes hand in hand with a new all-time high in the Dow Jones Index, which yesterday closed above the 30,000 point mark for the first time.
Bullish scenario (Bitcoin price)
Buying interest currently seems to be unbroken, any price setbacks are absorbed by the market and used for further purchases. If the bulls manage to enter the resistance range between USD 19,884 and USD 20,089 and also overcome it at the end of the day, a breakthrough to the 200 Fibonacci extension at USD 21,113 should be planned. If this resistance is also dynamically overcome, a follow-on movement up to USD 23,887 is conceivable. The maximum price target is still USD 26,664 (261 Fibonacci retracement). The investor sentiment is still not to be seen as greedy, even the relatively low Google search queries for the term Bitcoin do not yet indicate hype as in 2017.
Bearish scenario (Bitcoin price)
Although one could think that the chances of a successful short on the Bitcoin are better than they have been for a long time, there is currently a high potential for correction. However, all attempts by the bear camp to initiate a sell-off have so far been countered by buyers on the sidelines. Although the RSI indicator on the daily chart is trading in overbought territory with a value of 82, looking ahead to 2017 it appears that this is not sufficient to trigger a sell-off. As long as no sustainable reverse formation can be identified, the opening of new shorts almost inevitably leads to a fail trade. However, in order to increase the chances of a sustained price correction, a significant wave of selling under high volume is required. A first ray of hope for the bears would be a price drop below support at USD 18,630.
If sellers can push the Bitcoin Rejoin price below this level by the end of the day, a decline in the price to around US$17,845 is likely. If this support is also dynamically undercut, the strong support at USD 17,185 comes into focus. At this price level, the bulls are expected to resist again. If the seller side also manages to break this support at the daily closing price, a number of stop-loss orders are likely to be executed and subsequently cause the price of the key currency to slide down into the support range between USD 16,500 and USD 16,267 (super trend). If these chart marks also fail to provide support, the correction could extend to as much as USD 15,798. If bears manage to break through this support as well, this will activate the maximum bearish price target at $14,805.
Tough conditions for Bitcoin bears
For the time being, no further price slump below this support level is to be expected; the interest of both institutional and retail investors is too great. At the latest in this area, the bulls are likely to enter the playing field again and make new purchases on the long side. If, on the other hand, even this strong support is undercut by the daily closing price, a widening of the corrective movement in the direction of USD 14,311 and a maximum of USD 13,858 should be planned. Lower price targets are unlikely for the time being; the current trend of bullish price development is too strong. In order to reach the maximum medium-term price target of 13,198 US dollars, a sustained trend reversal is necessary in the crypto market, which is not in sight for the time being.
As recently as last week, the BTC dominance made an attempt to rise back towards the highs of May 2020. Although the dominance of the key currency initially formed a new high of 67.44 per cent for several months, it missed the price target by 68.01 percentage points. This was followed by a significant consolidation, which caused the BTC dominance to fall by almost 10 percent within 4 trading days. Only yesterday, Tuesday 24 November, did a bullish counter-reaction occur in the area of the important support level at 60.77 percentage points. Although the dominance currently rises back towards the 62.88 percent level, it now trades beneath the moving resistance of the last 200 days (EMA200) (blue) at 62.51 percent. The strong price jumps on the Altcoin market are having a lasting effect and have currently significantly reduced the market power of the reserve currency.
Bitcoin dominance: Bullish scenario
If the dominance can quickly rise back above the 62.88 percent and thus also overcome the EMA100 (yellow) and EMA200 (blue) again at the end of the day, an increase up to the 64.03 percent is conceivable. If this resistance is also broken to the upside, the resistances at 65.00 to 65.57 percentage points come back into focus. In order to recapture this strong area of resistance dynamically, it will be necessary for the reserve currency to break through to the all-time high of USD 20,089. Then, the next important resistances at 66.20 percent and 66.50 percent come into view as possible price targets. For the time being, the maximum price target is the high for the course at 67.47 percent. Only when the BTC dominance clearly overcomes this resistance at the end of the day will the chances of a breakthrough in the direction of 69.03 percent and 69.53 percent increase.
Bitcoin dominance: Bearish scenario
For weeks, it looked as if the reserve currency had the sceptre firmly in its hand again. The Altcoins had nothing to oppose the rally in Bitcoin. However, this week the rebounding top 10 Altcoins in particular turned the tables and took a significant share of the market away from the lead currency. This reversal is primarily due to the performance of the number 2, Ethereum (ETH), and the price explosion at Ripple (XRP).
If the Altcoins are able to use the current sideways phase of Bitcoin for further price outbreaks and push the BTC dominance back towards the 60.63 percent level, the chances of a continued consolidation of the BTC dominance increase. If this support is breached downwards, a correction to the uptrend line at 60.02 percent is likely. If this support line is also sustainably breached, the dominance could correct to the maximum retracement level. This runs at 58.80 percent. Thus, the price development of the key currency needs to be closely monitored in the coming days. Every pause for breath at Bitcoin should lead to a declining BTC dominance.