Last week has been a tremendous week for Bitcoin (BTC), as the price surged from $7,500 to $9,450. However, since the peak high at $9,450, the top-ranked cryptocurrency by market capitalization has not seen a continuation, as the price is consolidating $800 lower.
Is the halving hype over, and is the market ready for a correction after a 150% rally since Black Thursday?
Crypto market daily performance. Source: Coin360
The price of Bitcoin is facing a big resistance area
BTC USD 1-day chart. Source: TradingView
The price of Bitcoin is facing its next massive resistance area, i.e. $9,100-9,500. The price of Bitcoin broke through the resistance of $7,800 last week, after which a surge towards $9,500 occurred.
As the chart is showing, a clear rejection happened at $9,500. The price of Bitcoin dropped with $1,000 towards $8,500.
Clear support levels are shown by the green zones. The first level is shown between $8,250-8,400, while the next support level is the area between $7,600 and $7,800.
On the other hand, the red resistance area is found between $9,100 and $9,500. This resistance area was established in the summer period of 2019. During the massive run from Bitcoin that year, the price has been regularly finding support in the $9,500 area.
This pivotal area is now, therefore, strong resistance. A clear breakthrough in this zone would define a continuation to $10,500 and potentially $11,500.
Traders aiming for support around $8,400, while $8,600 acts as one
BTC USDT 30-minutes chart. Source: TradingView
The smaller time frames show a clear structure of range-bound movements. The upper resistance is found at $9,000 and $9,200, while the bottom support is found between $8,400 and $8,600.
As long as the price of Bitcoin remains to be in this area, traders will be compelled to take advantage of the range-bound movements.
The $8,800 area is a crucial pivot for further upwards momentum. If the $8,400-8,600 remains to be supported, a breakthrough of the $8,800 could trigger a test of $9,100-9,200 before the much-anticipated halving event that’s now less than eight days away.
However, a break below the support of $8,400, and the next major pivot is $7,800.
Total market capitalization consolidating as well
Total market capitalization cryptocurrency 1-hour chart. Source: TradingView
The total market capitalization chart of cryptocurrencies is showing a similar structure to the Bitcoin chart.
Clear consolidation inside a range, where $250-260 billion is the resistance area, while the $230-236 billion areas are classified as support.
Losing the $230-236 billion level as support would likely result in further downwards momentum, draining the whole cryptocurrency market down toward $215 billion as the next central pivot.
A clear breakthrough of $245 billion resistance is needed for the total market capitalization to continue its recent upward momentum.
Total market capitalization cryptocurrency 1-day chart. Source: TradingView
The daily picture of the total cryptocurrency market capitalization is showing a clear picture as well.
The support around $230-236 billion is a pivotal level from the past year, as the chart shows. Holding that level for support would open the door for potential tests of the next resistance around $256 billion.
However, a break below $235 billion would likely take the whole cryptocurrency market down by 10%, as the next major level is found at $207 billion.
Bitcoin dominance still going up going into the halving of Bitcoin
BTC Dominance 1-day chart. Source: TradingView
The dominance chart is getting to a crucial level for altcoins. The 67.50% level has been providing “support” throughout the past year. However, now it’s acting as “resistance,” as far as this terminology can be used for this chart.
A breakthrough above 67.50% could add more fuel for Bitcoin, as BTC/USD is clearly gaining momentum into the halving.
However, if 67.50% is again providing resistance, a further downwards break and tests of 60% could be expected. Such a breakdown can create a substantial and strong move for all cryptocurrencies.
The bullish scenario for Bitcoin
BTC USDT 30-minute bullish scenario chart. Source: TradingView
The bullish scenario on the smaller time frames is showing a few pivotal levels. The $8,400-8,600 has to remain support, as stated previously.
After that, a breakthrough of $8,800 is needed for further upward momentum. Once that occurs, targets of $9,100-9,200 are back on the table.
However, if traders and investors want to continue the real FOMO and momentum into the halving, a break of $9,100-9,200 is needed. If the price of Bitcoin rejects this level once again, the halving rally will then likely be over.
If the $9,100-9,200 is broken to the upside, a further surge can occur with potential targets of $10,500.
The bearish scenario for Bitcoin
BTC USDT 30-minute bearish scenario chart. Source: TradingView
The bearish scenario has a few different possibilities. It’s basically coming down to two things, with the first being the support at $8,400-8,600. Losing that level, and it’s likely to expect further downwards momentum towards $7,800.
However, the next pivotal thing to look for in the charts would be the construction of a lower high on the chart. Once the price of Bitcoin breaks the $8,800 area and can’t clear above $9,000, a renewed lower high will appear on the chart.
Such momentum could create a potential descending triangle and a likely breakdown later below $8,400. The next support area will also be $7,800.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.