While institutional are investing in the crypto market, Bitcoin is becoming increasingly popular. As proof: the first three weeks of this year 2021 saw the volumes of King BTC double in comparison to the same volumes in 2019 and 2020. Everybody is working on it: Banks, hedge funds, celebrities (Elon Musk through TESLA) …
It’s with no doubt today’s flagship asset. The one everyone is talking about. The one everyone wants.
Those who criticized Bitcoin and announced its death are currently biting their tongues, and many flip sides as the asset continue to rise. Indeed, volatility is the understatement of the year, to say the least.
BTC in weekly
The next logical question is: at what stage of this upward trend are we at?
Let’s start from the beginning. It’s tricky to sell since we are clearly in an uptrend. We will not talk about long-term investment but only about speculative here (long-term buying was initiated by smart money and some wise individuals much lower, or, at worst, a 20K breakout).
So, in this bullish context, is further consolidation possible?
The first thing I notice is the upward channel and the polarity zone of the 40k – 42k that has not been reworked. I think we can possibly slide under it to get an old volume zone ($37,950 Bitfinex) but the bullish reactivation of the last few hours invites us to be cautious.
The very small consolidation and the standard bullish divergence on one support show us that buyers are present. To be in line with the trend, we could have an interesting buy if prices were to slide over the old volume zone, overflowing the resistance that has become support by reversing polarity.
Now let’s take a look at Bitcoin’s dominance over the crypto market.
Currently, at 61%, this dominance seems to be holding a long-term trend.
I think that we will eventually break this trend.
These last few days, Altcoins having consolidated more deeply than Bitcoin, it would be quite logical to say that if a bullish reactivation were to take place, the alts would surely outperform Bitcoin (because they lost more than Bitcoin in the downturn).
We can see that in the event of an upward acceleration to overtake the ATH, Bitcoin would gain nearly 20%, while ETH, for example, would see its value grow by nearly 30%, 1.5 times more.
In this context, I would be rather favorable to attempt Altcoins purchase if those ones were to consolidate more deeply and offer me more attractive prices.
However, and by way of conclusion, I would say that we must remain wary: the trend monitoring being nevertheless well advanced at this stage, it is not impossible that BTC breaks its ATH but, if this were the case, I don’t think it would go very far: we have already burned quite a lot of fuel, and a speculative purchase on Altcoins to aim at 61.8% retracement of the fall, or even the old resistance, seems to be possible, but risky.
At this stage, those who bought cryptos at better prices have done their risk management (cash-out a part) and can let the latent evolve according to the market.
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