Following yesterday’s rally that allowed the cryptocurrency markets to regain much of last week’s losses, Bitcoin has been able to sustain above $3,500 and most altcoins have continued to rise. The market’s recent move appears to have validated the recent lows as a strong level of support.
At the time of writing, Bitcoin is trading up 3.3% at its current price of $3,560, up from its weekly lows of just under $3,200. Bitcoin’s recent price action also appears to have validated $3,600 as a strong resistance level, as its price has failed to break through this level on multiple occasions.
Bitcoin Moves Up, But the Bear Market Could be Far from Over
Following yesterday’s rally, Bitcoin dipped to lows of $3,480 after it touched $3,600 and was once again rejected earlier this morning when its price hit $3,600. It is unclear as to whether or not Bitcoin will gain enough upwards momentum to break through this resistance level.
While speaking to MarketWatch, Rob Sluymer, a technical strategist at Fundstrat Global Advisors, explained that the 200-week moving average could be a good stop-loss region for traders who entered long positions following yesterday’s move.
“While it’s premature to conclude a longer-term low is developing it is noteworthy/encouraging to see BTC beginning to respond to its next support level. We would recommend traders now use the 200-week sma [simple moving average] near between $3,100 and $3,200 as a stop-loss level to manage long side risk,” he said.
While speaking to Forbes in a recent interview, Jon Pearlstone, the publisher of the CryptoPatterns newsletter, said that the crypto market’s recent price action has been fundamentally positive, but further noted that there are multiple factors needed in order for a potential trend reversal to be in play.
“The indicators to watch for now are 1) Follow through — everyone sees today’s buying and increased volume. Are there buyers willing to join the party now and keep price above $3500? and 2) Hit bullish targets — will buyers join in and take price up to test first level resistance at $4250 or the 2018 trend line currently at the $5000 level?” Pearlstone explained.
Altcoins Sustain Post-Rally
Following yesterday’s market rally, most altcoins have sustained much of their gains and are trading up significantly over a 24-hour trading period.
At the time of writing, XRP is trading up 9% at its current price of $0.334, up significantly from its recent lows of $0.28. XRP appears to be stable at its current price levels, although its performance in the near-term will likely be dictated by how Bitcoin responds to the $3,500 region.
Ethereum is currently trading up 4% at its current price of $95.26, and another upwards swing is needed in order to push its price above the important psychological level of $100.
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