Analyst: Altcoins weigh on a rising Bitcoin

The lead analyst at RoboForex, Dmitry Gurkovsky, explains the possible future scenarios for Bitcoin’s price movement.

More and more reports that Bitcoin could replace gold in the near term are emerging. After all, this digital currency is more functional and easier to use than a bar of precious metal. Bitcoin is much easier to use, store, and pay with.

All this strongly supports the current bullish mood in the market — even conservative investors are starting to view the leading asset as “digital gold”. And according to polls, the number of millionaires who are willing to invest in cryptocurrencies is growing: about 73% of those polled are prepared to buy digital assets in the next two years.

It is worth noting that buyers hardly let the BTC/USD rate fall: at the slightest correction, bulls immediately buy the asset, and its rise resumes.

This is clearly visible on the 4-hour chart of the cryptocurrency. As soon as the price falls below the fast moving average, there is an upward rebound and the continuation of the uptrend. Meanwhile, BTC/USD quotes have not fallen below the slow moving average since the impulse began on October 10, 2020. Only a break of it will force buyers to ease pressure on the bears, resulting in the price entering a protracted correction.

4-hour BTC/USD chart from Bitstamp on TradingView.

Mining revenues reached their maximum after the sharp drop to the halving. This once again confirms that the market has fully recovered and is ready to move further within a bull trend.

However, the growth leader this trading week is not Bitcoin — as soon as the quotes of the first cryptocurrency neared an all-time high, the altcoin market immediately showed solid growth.

Most of the largest-cap coins have not yet repeated Bitcoin’s dynamics, so the potential for altcoin growth is fairly strong. This is evident in the XRP example, whose market capitalization has risen more than twofold since last Friday.

On the weekly chart, the RSI staying above the resistance line remains a strong signal in favor of breaking the all-time high. In most cases, such a situation ends with a breakout of the nearest resistance, which in this case sits at the $20 000 level.

Weekly BTC/USD chart from Bitstamp on TradingView.

On shorter timeframes, bulls immediately buy the asset during the development of downward corrections, so there is every chance in the near future to see a breakout of resistance without a noticeable decrease in Bitcoin’s price.

If, on the other hand, we consider the channel width as a guide for developing the uptrend, the growth target would be the $25 000 level.

Subscribe to ForkLog’s news on Telegram: ForkLog FEED — the full news feed, ForkLog — the most important news and polls.