Even though Bitcoin price has shown some weakness, key support levels are holding as BTC prepares for another shot at $10,000.
The price of Bitcoin (BTC) has been showing weakness throughout the week. However, the key support level is holding up, and this triggered the continuation of many altcoins such as Tezos (XTZ) and Algorand (ALGO), which are soaring on July 11, gaining over 9% and 17%, respectively.
The massive surges in altcoin price usually occur when Bitcoin remains calm and this is what we have seen happening in the previous two months. The question is how long will this last and is the top-ranked cryptocurrency by market capitalization ready for a renewed test of the $10,000 resistance level?
Crypto market daily performance. Source: Coin360
Bitcoin price holds above $9,000 as a key support level
BTC USD 1-day chart. Source: TradingView
The structure is still intact, as the necessary conclusion comes around the corner. However, the price of Bitcoin has been showing weakness throughout the week.
However, what are the signals that the markets are showing?
The first one is the crucial upwards trend. This trend remains to be active, as long as the market is continually making higher lows. It’s essential that Bitcoin keeps the $8,500-$8,800 support level on higher time frames. If that level is lost, a chain reaction of stop/loss triggers could occur.
However, on a lower time frame, the same can be stated of the $9,000-$9,100 level acting around the trendline.
Second, the market is acting above the 100-day and 200-day moving average and that’s a bullish signal as this implies bull territory. Furthermore, both of these MA’s are coming into play sooner than later. These MAs can act as support which will be pushing the price further up.
Finally, by defining a renewed higher low, the RSI oscillator made a hidden bullish divergence, which suits a repeated test of the resistance zone at $10,000.
What are the key areas on the shorter time frames?
BTC USD 4-hour chart. Source: TradingView
The 4-hour gives a clear explanation of the recent range-bound movements. The $9,400 level is acting as resistance, while the crucial support at $9,000-$9,100 is holding up as support.
This range can sustain for several days as the price is stuck in between these levels.
However, the conflict in the markets occurs as the price has been making lower highs since the peak of June 1. It’s crucial that bulls manage a breakthrough of the $9,400 resistance level, through which a retest of the $9,600 resistance block is likely to occur.
A breakthrough of $9,600 means continuation to the $10,000 resistance level is possible and if this level is tested again, a breakout becomes more and more likely.
If bears are to take control of Bitcoin price, first the $9,000-$9,100 support level must be lost as then the higher lows construction will be erased.
Total market capitalization is holding the uptrend
Total crypto market capitalization 1-day chart. Source: TradingView
The total crypto market capitalization chart is showing a steady picture. Remarkably, the chart is making a new higher high, while Bitcoin is lagging and has yet to make a new higher high.
This shows that altcoins have been in the spotlight recently, as they’ve gained more momentum and market capitalization. Next to that, the chart shows a hidden bullish divergence showing up on the chart next to the support at $240 billion.
Further compression is likely to occur before a new impulse to the upside occurs rather than a further downside.
The bullish scenario for Bitcoin
BTC USD 1-day bullish scenario chart. Source: TradingView
As discussed earlier, the $9,000-$9,100 area was a crucial pivot to hold. Luckily for the bulls, the market has held for support, through which the bullish scenario can be designed.
The $9,000-$9,100 area needs to hold through which the uptrend sustains. As long as this uptrend is sustaining, the momentum is upwards and a $9,600 test can occur.
This $9,600 resistance level is untested and ripe for a test of the markets. If the price of Bitcoin rejects at this resistance level, the next target area for support is the $9,300 zone.
If that structure continues to unfold, then a renewed test of the $10,000 area is likely to occur. Thus, a repeated test of the $10,000-$10,500 area would lead to a possible breakout upwards.
The bearish scenario for Bitcoin
The bearish scenario is pretty straightforward and has some crucial pivots to watch.
BTC USD 1-day bearish scenario chart. Source: TradingView
The crucial pivots are another rejection at the $9,400 level leading toward a double-top confirmation and a potential trend reversal.
Such a rejection would create another lower high and warrant further downward pressure. If that occurs, it’s likely to see a renewed test of the $9,000-$9,100 level. However, the more often an important level gets tested, the more likely a break will occur.
The major pivot to watch for is the breakdown of the $9,000-$9,100 level. If that occurs, the volume should show up with a chain reaction of stop/loss triggers going off. A drop toward the $8,500-$8,600 area is likely after which a bearish rejection of that $9,000-$9,100 level would warrant further downward momentum.
Similarly, if such a drop occurs, the 100-day and 200-day MA’s are lost, and the market is likely to start seeking the 100-week and 200-week MA’s for support.
The first major support level is found between $7,500-$7,700 if the market drops below the range support of this two-month consolidation range.
If that doesn’t occur, the market is ready for further upwards and range-bound movements. As the chart is showing, these movements can happen until the end of August. This would suit altcoins relatively well as they can continue basking in the spotlight.
But remember, if Bitcoin looks to be making a volatile move shortly, then altcoins will suffer.
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.