Bitcoin (BTCUSD) (3-day/8-hour comparison)
Bitcoin continued with bullish price action last week, as we’ve broken through $60k without many signs of rejection.
The retraces have been minor, and dips bought back up quickly, good signs for bulls.
We can see in our 3-day range, we tapped the first red “sell zone” perfectly, but we haven’t seen a major pullback yet.
On our 8hr range, we can see a clear breakout, with the extension levels acting as temporary consolidation points. Every retest dip appears to be establishing new support levels, very healthy price action, not looking over-extended. That being said, we should exercise some caution as rampant greed & euphoria can often lead to harsh corrections. A retest of the $52-56k area could be a prime spot for entries, but so far there hasn’t been a sign of bulls letting up, “Uptober” living up to its name so far.
Bitcoin has taken the spotlight, and altcoins have for the most part been underperforming on their BTC pairs.
Ethereum (ETHUSD) (3-day/8-hour comparison)
Ethereum continues to ride BTC’s coattails, consolidating under ATH resistance. ETH has had brief moments of attempting to take the lead from BTC, but so far hasn’t been able to follow through.
We’ve seen this type of drawn-out consolidation from ETH in the past. Price seems to hang around and appear sluggish until it suddenly breaks free.
On our 3-day chart, we can see the last candle close just above our first red “sell zone”, a positive sign for bulls. Tonight will close the current 3-day candle and we’d like to see it get back into the green at a minimum. Retests of the low 3000s is still plausible, as we’re seeing ETH be very sensitive to any drop from BTC in the past week. This shouldn’t be too shocking when we look at how BTC is gaining momentum on its percentage of the total crypto market share.
Fundamentals & Correlations (weekly)
Looking at the Bitcoin Dominance chart (BTC.D) we can see it broke through some resistance and could be approaching the crucial 51% level with another push. This could mean trouble for altcoins, and we’ve seen how most have been outperformed as holders drop their bags to jump onto the Bitcoin train.
The US Dollar Index (DXY) has failed again to break through our diagonal resistance level and began to retrace- giving some added strength to an already bullish market structure for Bitcoin.
Things seem pretty strong for Bitcoin, which should mean future altcoin gains are coming, but keep in mind that the prime opportunity is going to come when the markets are full of fear. As always, don’t get swept up in the emotions of the market, control your risk, and be prepared for whether you are right or wrong.