This week, the cryptocurrency market and Bitcoin (BTC) were shaken by fake news regarding Litecoin (LTC), which produced a jump in volatility. The market’s structure, on the other hand, remained unchanged. A golden cross is forming on Bitcoin’s price, indicating that it may be bottoming out. In addition, exchange reserves are at historic lows, indicating that most investors are withdrawing their Bitcoin from exchanges, limiting the overall supply of Bitcoin that can be traded on the market.
Will the golden cross cause Bitcoin to break out?
The BTC/USD daily chart reveals a few significant points. The first and most crucial is the upcoming probable golden cross. The death cross was the main emphasis in the summer, as the mood had shifted to ultra-negative, and many traders predicted additional downside as a result. Since then, the market has been in an uptrend, with the cross of moving averages (MAs) acting as a lagging indicator. However, just because the cross occurs doesn’t indicate the market will continue in that direction. A golden cross is now a bullish indication, particularly when Bitcoin’s price is about to break above the MAs. If this occurs, and Bitcoin’s price rises above these moving averages, these levels can act as new support for a much larger surge.
Bitcoin price chart: Levels to watch
Last week, the market saw a dramatic drop, with Bitcoin’s value plummeting from $52,000 to $42,000. Bitcoin’s price struck a fantastic support level, resulting in an extended wick. This extended wick indicates a fresh level of support and buying pressure. Fake reports about Litecoin’s relationship with Walmart resulted in a wild shift in the last few days. The first reaction was a massive bounce, which was immediately followed by a significant correction. During volatile moves, zooming out to observe the markets at greater timeframes is a smart idea. These will indicate the critical levels for which you should be on the lookout.
These are the crucial levels to be on the lookout for, and they’re still available between $42,800 and $44,000. As long as this zone retains the support, upward movement is probable. A significant correction preceded the bearish divergence. The worst-case scenario is if the markets remain over $42,800-44,000. Market instability was sparked by fake news concerning Litecoin. The crucial support between $42,800 and $44,000, however, was preserved. That is the most important conclusion.
The whole crypto market cap relies on support
The market capitalization of cryptocurrencies suggests that there is a lot of interest. More upside to an all-time high is possible if overall market capitalization exceeds $2 trillion. Because the total market capitalization has achieved an all-time high, there is a tiny change in Bitcoin’s price. Once the overall market capitalization has retested that all-time low zone, there is a greater likelihood that Bitcoin will break out to new all-time highs. However, the entire market value of crypto will most likely overtake Bitcoin faster than Bitcoin. In recent months, altcoins have outpaced Bitcoin.
Bullish divergence and a falling wedge are in play
A prospective falling wedge shape can be seen on the Bitcoin four-hour chart, which could break to the upside. The upside breakout must materialize since resistance at $47,000 has been functioning as a significant resistance since the last slump.
Once Bitcoin exceeds $50,500, its price will soar over $47,000. There are just a few levels from which the price can reject. The previous adjustment was extremely vertical.
This does not imply that Bitcoin will appreciate. If Bitcoin can produce a lower bottom than $45,000, the bullish divergence will be confirmed, and a breakout towards $47,000 could occur. This is still a formidable barrier to overcome.
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Also read: Litecoin: Everything you need to know
