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Bitcoin price fluctuates in a narrow range and is targeting $ 8,500

May 23, 2020

The price of Bitcoin (BTC), the top-rated cryptocurrency by market cap, peaked at $ 10,500 before halving on May 11. However, the price of Bitcoin has had problems since then and is currently showing more signs of weakness.

On the other hand, Altcoins are showing signs of life, with the BTC market dominance index falling from 67% to 65% after halving. Is the momentum shifting towards Bitcoin altcoins after the most anticipated event is behind us?

Bitcoin price fluctuates in a narrow range and is targeting $ 8,500
Bitcoin price fluctuates in a narrow range and is targeting $ 8,500

Daily performance of the cryptocurrency market. Source: Coin360

The bitcoin price remains in a wide range with decreasing volatility

The Bitcoin price gets stuck in a wide range, as shown in the table below. The resistance range in the red zone is between $ 9,800 and $ 10,100. At the same time, the price finds support in the zone of $ 8,250 to $ 8,500.

In addition, BTC is hovering above the 100 and 200 day (MA) moving averages, a bullish signal for the markets.

1-day chart of BTC / USD. Source: trade view

As the hype slowly subsides and the market returns to its daily rate, the price of Bitcoin is also stabilizing. It is unusual

No, that’s normal. The halving was such a big event for Bitcoin that the hype surrounding social media can lead to unsustainable price increases and losses.

2016 BTC / USD daily chart. Source: trade view

The above halving shows a similar structure. Bitcoin’s price moved significantly ahead of the event, then there was a drop before halving and a new range was set. Bitcoin’s price consolidated within a range over the month.

As a result, there was a further decline and the market continued its upward momentum while holding the 200-day MA as support for the maximum in December 2017.

Bitcoin can’t break $ 10,000 and falls off the rising wedge

Chart of the 4-hour BTC / USD pair. Source: TradingView

As the 4-hour chart shows, the Bitcoin price lost the rising wedge structure and broke. In other words, another mistake that breaks the psychological barrier of $ 10,000.

Along with the decline, the price lost support at $ 9,300. The recent movements have also confirmed this level as resistance. However, support was found at USD 8,900, as the graph shows.

What’s next? Is the upward trend over? Or is the market simply returning to normal, with alternative currencies receiving more attention?

The total market capitalization remains above MA for 200 days

1-day chart of the total capitalization of the cryptocurrency market. Source: TradingView

Overall market capitalization continues to support the 100- and 200-day MA, which is crucial for further upward momentum.

By using non-precise knowledge, the market capitalization consolidates within eight weeks even after a 120% increase. What is the crucial level that needs to be maintained? It’s the gray box at $ 220-225 billion.

If this level remains as support, the total market cap will be in a prime position for an increase of more than $ 300 billion, possibly even $ 360 billion. However, if this key level is lost, you can see a rapid decline.

The importance of this level lies in the fact that both the 100-day and 200-day MA act as a confluence of support with a strong level of horizontal support, which served as support in 2018.

1-day chart of the total capitalization of the cryptocurrency market. Source: TradingView

Maintaining the $ 220-225 billion support level will not only be a strong signal for further upward momentum, but will also make the March 12 decline a major shock for the stock market as a whole. Cryptocurrencies.

Finally, the volume indicator shows an increase in volume. This is another strong signal as it would indicate more accumulation.

The market capitalization of altcoins remains behind

1-day chart of the total market capitalization of altcoins. Source: TradingView

The Altcoins market cap chart shows a strong support / resistance turn of $ 70 billion, a level that also converges with the 100 and 200 day MAs as support. This is important because market capitalization has not lost these MAs during the previous upward cycle of the crypto market.

Since Bitcoin had significant support at $ 6,000 in 2018, total market capitalization had also had a positive impact of $ 220-225 billion. But now total market cap is back at the $ 220-225 billion support level, while Bitcoin’s price is now 50% higher.

Altcoins themselves are also lagging behind, as $ 113 billion is the 2018 level of support that’s comparable to Bitcoin’s $ 6,000 level.

1-day chart of the total market capitalization of altcoins. Source: TradingView

The graph above shows that altcoins are generally lagging behind. Is that a bad thing? No, Bitcoin is the first company to move, and it peaked in December 2017. Then the altcoins followed.

At that point, Bitcoin had its first run at $ 10,200 before halving. But now the volume is also increasing for altcoins. This means that demand and interest are increasing and may pave the way for the final catch-up process of alternative currencies.

Bullish scenario for Bitcoin

4-hour chart of the bullish scenario of the BTC / USD pair. Source: TradingView

The gray area (with a potential wick of $ 8,950) must hold. After that, a breakout of $ 9,300 is required to eventually push the price down to $ 9,600 or more.

If such a step occurs, the next step is likely to be a retest between $ 9,800 and $ 10,100. As this level has been tested several times, the resistance level should generally be lower.

In this sense, an upward break in one scenario could result in Bitcoin’s price being close to $ 11,000 or $ 11,500.

Bearish scenario for Bitcoin

4-hour chart of the bearish scenario of the BTC / USD pair. Source: TradingView

However, as soon as Bitcoin’s price cannot exceed the $ 9,300 mark, further testing of the lows should be expected. The levels to be tested would be $ 8,800 (already tested), but especially $ 8,200 to $ 8,500 in current support.

However, this would generally not be catastrophic for Bitcoin. The structure would remain on an upward trend from March 12th. Since then, the price has risen and fallen, which by definition is a strong upward trend. Consolidation is indeed healthy for the market if new highs are to be reached.

The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every step of investment and trading involves risks. You have to do your own research when making a decision.