Bitcoin (BTC) has seen a tremendous bull runEspecially since September when the price of BTC rose from $ 10,500 to $ 18,400, a recovery of 75% in less than three months.
Also since March, The BTC / USD pair is up nearly 400%, making it the top performing asset of 2020 and it probably surprised many investors.
Let’s look at the charts to see if the current rally is sustainable and if a short-term reversal can be expected.
Bitcoin hits 1,618 Fibonacci and could find a top soon
Bitcoin’s weekly chart shows a massive run in the previous period as the region is conquered around the all-time high.
A clear zone of resistance is marked around this all-time high This can act as a trigger for investors to take profits off the table.
But still, Most importantly, the Fibonacci expansion of 1.618 has also been reached. The Fibonacci tool is a powerful indicator for marking potential highs and lows, and the 1.618 value is possibly the most extensive.
There are currently several arguments for a possible correction. including the index of fear and greed approaching record levels.
There are several key price levels to watch as Bitcoin corrects before it hits $ 20,000. Initial interest for traders is around $ 16,000. The next levels are at $ 13,500 and $ 11,600.
Total market capitalization reaches $ 500 billion
The total market capitalization of cryptocurrencies has reached the next and last zone of resistance before a possible new all-time high: US $ 500 billion is likely to be a major hurdle to overcome.
Surprisingly, Bitcoin price is now only 10% below its all-time high and it has already passed its highest market cap ever.
Meanwhile, The market capitalization for cryptocurrencies is still 35% below its all-time high. This shows that Bitcoin is currently in the spotlight. Altcoins will most likely catch up later.
However, if the cryptocurrency market begins to correct, The most likely range for a change in support / resistance (S / R) is $ 380 billion to $ 400 billion. This level has not yet been tested, since an S / R switch here would certainly be a bullish sign of further benefits.
Such S / R fluctuations are common and very healthy in the bull markets to continue the general uptrend.
Will Bitcoin’s dominance peak in December?
Historical data says a lot about market cycles. Until now, The fourth quarter of 2020 shows many signs similar to previous years. One of them is the increasing dominance of Bitcoin in recent weeks. That has risen to over 66%.
As long as Bitcoin is in the spotlight Altcoins don’t work well. And if bitcoin corrects, altcoins will likely keep falling.
But still, The time when altcoins shine can be approaching day by day. The key indicator to look out for is the strength of the Ethereum (ETH) price versus Bitcoin and whether the ETH / BTC pair has bottomed out.
The best conditions for altcoins are a slowly increasing routine in the price of bitcoin. Once that happens, most likely in the first quarter of 2021, Strong momentum could push altcoin prices across the board.
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement involves risk. You should do your own research when making a decision.