The wider cryptocurrency market entered a period of consolidation on Tuesday following Bitcoin’s (BTC) brief spike above $40,000 the day before, which helped ignite a rally across the market and brought a renewed sense of optimism to the market.
While Tuesday’s price pullback may suggest that Monday’s rally was simply a short squeeze, others point to the rising Grayscale Bitcoin Trust (GBTC) premium, which is now at its highest levels in months at -5.88%, suggesting that institutions are once again betting on more BTC price upside.
Bitcoin bulls battle to reestablish uptrend
However, as pointed out by pseudonymous independent market analyst Rekt Capital, Bitcoin’s price chart shows a fractal pattern that is similar to the price-performance in October 2020 — just before BTC’s price began its run to a new all-time high.
When was the last time #BTC broke beyond the 50-day EMA resistance?— Rekt Capital (@rektcapital) July 27, 2021
Back in October 2020
This is when $BTC formed a very similar fractal of Bitcoin's current price action#Crypto #Bitcoin pic.twitter.com/2acUC9KoeV
If a similar pattern plays out in the current market, Bitcoin’s price will see a continuation of the uptrend that the Amazon rumors initiated.
Not all of this suggests a continuation of the upward momentum, however, as was pointed out by Jarvis Labs analyst and co-founder Ben Lilly, who has been monitoring on-chain data to gain deeper insight into the most recent pump, particularly with Ethereum’s London hard fork slated for Aug. 4.
“Onchain activity and demand hasn’t showed up. Pair this up with Amazon news as fake and shorts getting rekt, I wouldn’t be surprised to see low $30ks be4 1559.”
An example of bearish bias, however, was provided by the pseudonymous Twitter user Bear Wolf, who saw Monday’s developments as nothing more than a short squeeze amid a wider bear market.
“19K is still my target for the end of the bear market,” he wrote. “Dead Cat Bounce to 46K (Short Squeeze). TA invalidates if we pump to 50K and find support >>ABOVE
Altcoins give back gains
A large percentage of the gains seen in the altcoin market on Monday was given back on Tuesday as the euphoria from the Amazon rumors subsided.
Dogecoin (DOGE) and Solana (SOL) were the two hardest-hit tokens in the top 20, seeing losses of 10% and 10.8%, respectively, while Monday’s top performers Strike (STRK) and Venus (XVS) both dropped by 16%.
A pair of 30% gains from Axie Infinity (AXS) and MyNeighborAlice (ALICE) marked the best performances of the day, while the blockchain-based identity management solution Civic (CVC) saw its price increase by 20%.
The overall cryptocurrency market capitalization now stands at $1.488 trillion, and Bitcoin’s dominance rate is 47.8%.
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