Trader Илья Мещеряков explains the current market situation.
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Although Bitcoin remains in an uptrend, several market dynamics have shifted: Bitcoin’s dominance index continues to fall, and the main returns must be sought in altcoins. However, digital gold remains the asset with the lowest risk.
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Bitcoin was recovering from several days of losses early in the week. At the time of writing, the coin was trading near $58,500 — roughly $2,000 above last week’s low.
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The resistance near $59,400, which was discussed in the previous overview, proved stronger — a renewed consolidation and downside rejection is seen. In the current medium-term uptrend, a move higher could be possible thanks to heavy buying pressure on pullbacks.
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In the medium-term horizon, the price could trade in a range between $57,000 and $59,400, a plausible cap before an advance beyond $61,800 to a fresh all-time high. The most bearish scenario at present appears to be a move toward the support zone around $54,350 and the formation of a wider trading range.
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The current lull in volatility and the formation of a trading range with swings under 10% of Bitcoin’s price is favourable for altcoin profitability, which historically reacts nervously to moves in the first cryptocurrency.
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Short-term bullish prospects — after breaking the local resistance zone of $58,300 (shown in the bottom graph), the price moves toward $59,400, where it is almost always met with a local downward rebound. The broken zone itself will serve as good buying points.
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The zone around $59,400 can be traded either on a breakout (the trigger will be around $60,000) or on a pullback. Risk limit — $60,000. Targets for upside are $63,000 and higher; for downside, $57,140.
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The market is in euphoria — many coins have surged more than 100%. Bitcoin needs time to break through the key resistance. This is worrying, as peak euphoria and the onset of the altseason often signal the end of the bullish cycle.
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The long-term uptrend remains intact, which allows profits from holding coins.