Bitcoin ($BTC) has stopped just short of a potential top at $90,000, and has already sent a candle wick down to $85,350, displaying some huge volatility after such a massive surge. Altcoins are mostly in the red, as traders await the next developments. Will Bitcoin and the altcoins now see a decent retrace?
Bitcoin next move is key for altcoins
It’s decision time for traders and perhaps investors, as the recent gargantuan surge from Bitcoin and a lot of the altcoins comes to what could be a distinct pause, and even the beginning of what could be a sizable correction.
The key to everything is going to be what the $BTC price does from here. Whilst it could go down to confirm a much lower level as support, such as $80,000, or even as far down as $74,000, it could also be that the current price action will now start painting the form of a flag.
The wick down to $85,300, which was bought up very rapidly by the bulls, signals that buyers are not prepared to see the price plunge back down to lower levels. Of course, it’s early days, and the price could start working its way down until some panic does start to set in, possibly forcing the price down to the aforementioned levels.
Crypto Total Market Cap reaches $3 trillion
Source: TradingView
Looking at the entire market cap for crypto, it can be seen that it stopped just shy of the $3 trillion mark. This also coincides with the 1.272 Fibonacci, and would be a perfectly healthy place to make a retrace.
It can also be observed at the bottom of the chart how the Stochastic RSI momentum indicator has just rolled over, having hit its top. This signals negative price momentum from here, until such time as this indicator crosses back up. Around the 80.00 level would possibly be the best scenario for bulls.
Danger for altcoins as potential double top on Total3 chart
Source: TradingView
The Total3 chart is the combined market capitalization of all the cryptocurrencies, with the exception of $BTC and $ETH. This gives the overall picture for the altcoins.
It can be seen how perfectly the 0.786 Fibonacci was reached, and how the price then rose above on this week’s candle. However, the danger now is of a double top, which is a bearish reversal pattern.
Also, the week has only just started. If the altcoin market cap descends below the 0.786 and the weekly candle closes below, this would leave a long candle wick to the upside, and would be an extremely bearish reversal signal.
Can Bitcoin form a bull flag and negate bearish scenario?
In order to avoid this negative scenario, it will be up to Bitcoin to turn the current reversal into a bull flag. If the $BTC price can continue to chop around just below the $90,000 horizontal level, a resulting bull flag would be an incredibly bullish continuation pattern. This would also likely save the altcoins.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2024/11/altcoins-take-a-dive-as-bitcoin-btc-hits-possible-temporary-top