After a wick down to under $18,000 at the weekend, bitcoin has now stabilised and is enjoying a rally, having recaptured the major support at around $19,500. The number one cryptocurrency is at $21,300 at time of going to press.
After a two week slump from around $32k, which also included a record-breaking 8 red daily candles in a row, bitcoin now appears to have gathered itself, and a bounce is currently taking place.
With much bearish sentiment still in the market, and other potential liquidations still in the pipeline, it’s not at all certain that the bounce in the crypto market will contain much vigour.
A downward sloping trendline that began on May 11 is one possible target. By the time the bitcoin price reaches it again it could be at around $25k. If there is no rejection here, then perhaps we could see bitcoin returning to test the previous $29,000 to $30,000 major support, which has now flipped into resistance.
Bitcoin’s small bounce has also brought the altcoins back to life, for however temporary a time that may be. Ethereum has bounced a nice 30% over the last 3 days or so, and has climbed back above a very long upward sloping trendline that began way back in early March of 2020.
Where the price is right now at $1,150, also coincides with a retaking of the 78.6 fibonacci level. This is therefore very strong support for ethereum, and an incredibly important level to hold. $1,400 is the next target to the upside, with $1,700 above that.
Among the altcoins that have also reacted strongly is LINK. The number one oracle play has risen over 40% since its bottom, and it’s now sitting at the $7.35 resistance. Consolidation above this level might see it go higher to $9.60, which could be the next target.
MATIC, the layer 2 for ethereum, has also bounced back around 40%. It’s now hit a resistance that was formed back in April of 2021. Should it manage to consolidate above, then the 78.6 fib beckons from above at a price of $0.63, which would equate to nearly a third increase.
Zilliqa (ZIL) fell to its June 2020 support, and has bounced back strongly since then, recording a more than 50% rise. It has since lost about 10% of that. However, a return to its own 78.6 fib level would mean an 85% rise overall.
Nevertheless, all eyes remain on bitcoin, and should the king of the cryptocurrencies continue to move up strongly, then some of the fundamentally strong cryptocurrencies could take advantage and post even higher gains.
In the medium term - generally for the rest of this year at least, it’s investor beware though. Many analysts are still calling for bitcoin to go a lot lower, and given the gloomy economic outlook, they may well be right.
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.