Bitcoin price is struggling to crack $10,000 while other cryptocurrencies are attempting to catch up during the weekend lull.
The price of Bitcoin (BTC), the top-ranked cryptocurrency by market capitalization, hit the psychological barrier of $10,000 but immediately rejected. Meanwhile, the sentiment is shifting from fear towards greed as the Crypto Fear & Greed Index is now above 50 for the first time in three months.
However, altcoins have been showing weakness across the board. Investors are selling their altcoins to catch the Bitcoin train with the halving now less than three days away.
Crypto market daily performance. Source: Coin360
Bitcoin hits the psychological level of $10,000
BTC USDT 12-hour chart. Source: TradingView
Bitcoin is showing strength as the halving is approaching with the hype only increasing by the day. FOMO (fear of missing out) is increasing as well, which makes people eager to step into Bitcoin and the price to rally heavily.
However, is such a rally sustainable, or will this be another case of “buy the rumor, sell the news”? Based on the previous halving and the previous halvings of Litecoin (LTC), this is entirely possible.
People get intrigued by the hype around the event, as they expect a short-term bullish outcome to occur on the markets, and they start to buy into Bitcoin.
Where can we see that? In general, these movements can be spotted in the altcoin markets. Usually, when Bitcoin sees a big rally, people FOMO into Bitcoin. One such example is Ether (ETH).
ETH BTC 1-day chart. Source: TradingView
While the USD value of Ethereum is remaining relatively stable (as the price has been hovering between $197 and $215 in the past two weeks), the BTC pair is getting absolutely hammered.
But why? It’s because people are selling their altcoins to catch up to Bitcoin. Ether has seen a selloff of 20% in the BTC pair in the recent week, while ChainLink (LINK) and Tezos (XTZ) have seen a 30% selloff in the past ten days. Indeed, all selloffs have been seen in the BTC pair while the USD pairs have remained relatively stable.
Interestingly, previous bull market moves have seen similar action. For example, Bitcoin’s peak price was during December 2017 with a high of $19,700. This was when there was a huge selloff in the BTC pairs of altcoins.
However, just around this time, the altcoins started to bounce heavily and showing strength, resulting in the biggest “altseason” the market has ever seen. The price of Ether rallied towards $1,300-1,400 in the month after that.
A similar structure is also forming right now. The selloff of altcoins results in low prices enticing investors to jump back into Bitcoin. This is why today when the price of Bitcoin retraced a few hundred dollars, many altcoins bounced such as Chainlink.
LINK BTC 12-hour chart. Source: TradingView
The price of Chainlink lost 30% in value against BTC in the past two weeks while the USD value remained stable. The price retraced to support at 0.00037000 sats and then saw a strong bounce. LINK price jumped by 18% to $4.10, which is a new three-month high.
However, the significance and the moment of the jump are the most important concepts to watch.
The jump occurred the moment that Bitcoin started to retrace. Usually, altcoins fall off a cliff when that happens. But this time altcoins were jumping left and right, while Bitcoin price started to correct.
Another example is shown here, which is Basic Attention Token (BAT).
BAT BTC 1-day chart. Source: TradingView
This is one of the strongest movers in the past two days as the price rallied more than 40% in BTC value. It lost crucial support but then dipped toward the next one and bounced heavily as the chart shows.
This coin also moved the moment that Bitcoin started to retrace. But this isn’t strange as it’s pretty normal to expect these movements across the board. While some are selling altcoins to catch the Bitcoin train, others are selling their BTC in this region to buy up “cheap” altcoins.
The bullish scenario for Bitcoin
BTC USDT 12-hour chart. Source: TradingView
The bullish scenario is pretty straightforward. The level between $9,250-9,400 has to hold for the current rally to continue.
The next step would be a breakout of the heavy resistance zone between $10,050-10,350. Breaking and flipping this level into support would be a good sign for the bulls. The next targets will then be $10,800 and potentially $11,600-12,000, a level with an open CME gap (from August 2019).
The bearish scenario for Bitcoin
BTC USDT 12-hour chart. Source: TradingView
The bearish scenario shows a clear structure. Assuming that the hype fizzles after the Bitcoin halving next week, a retrace and correction may be inevitable.
However, whether that will happen with a lower high or another top in the $10,050-10,350 area is debatable. A blow-off top could still occur in the resistance area for confirmation of a bearish divergence and potential trend reversal.
This dropdown and retrace should trigger altcoins to start rallying as they are eager to follow Bitcoin. Hence, a breakdown below $9,400 could be a sign for them to start recovering.
Losing the $9,400 level would be a bearish signal for the momentum of Bitcoin, but potentially a bullish signal for altcoins to catch up.
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.
