Did we actually get an UPtober? Bitcoin (BTC) rallies up again near its all-time high. However, it’s been having trouble breaking the high and the price has corrected since then. Let’s check the charts and see where the crypto market is at! 

Disclaimer*

I am not a financial advisor. The content is for informational purposes only. You should not construe such information or other material as legal, tax, investment, financial, or other advice. Nothing in this report constitutes a solicitation, recommendation, endorsement, or offer by any entity to buy or sell any securities or other financial instruments in this or any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

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Bitcoin

This week, Bitcoin, against the dollar (USD), broke out again above $70,000.00 and almost touched the recent all-time high at $73,620.12. This move inevitably got market participants feeling bullish and expecting a new all-time high around the corner. Unfortunately, BTC fell short and has begun correcting downward since then. It is trading around the $69,000.00 level, which is significant because this level is its previous all-time high from November 2021.

Something to notice is that Bitcoin finally broke out above the parallel channel it has been trading in since March 2024. Several signs showed the channel ready to break to the upside, but the clearest indicator was that the channel’s resistance kept getting tested. The more times a price level or area is hit, the weaker it gets. The channel’s resistance was tested 7 times already, making it only a matter of time before BTC broke out. 

Though BTC failed to make a new high, it still trades above the channel today. Inside the channel, it would have been wise to buy the lows and to sell each hit at the top of the channel. Currently, the price is showing a different situation. Now that BTC is hitting the channel from the upside, the previous resistance will become support until it is proven otherwise.  

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Regarding short-term support and resistance, there is some support around the $69,000.00 level (November 2021 ATH) and more support at the channel top, which is around the $67,000.00 area. Should these supports hold, Bitcoin's price action would be very bullish, and it could push it to new highs. Should this area fail to maintain, there is minor support at the $65,000.00 level, but it would probably bring BTC back to the channel midpoint at around $59,600.00. This is because failed breakouts (which would be confirmed if $67,000.00 couldn’t hold) tend to move prices quite a lot in the opposite direction. In terms of resistance levels, Bitcoin has no major ones except its current all-time high at $73,777.00. 

In terms of other indicators, Bitcoin also looks relatively healthy. For example, BTC tests its 20-day moving average (MA) from the upside. Moving averages act as dynamic supports/resistances, and many traders use them to identify trending markets. The MA 20 was a decent support last October 2024 and could continue to hold this month. 

Bitcoin also looks fine on the Relative Strength Index (RSI). The RSI is a popular technical analysis tool traders use to measure the speed and change of price movements of an asset over a specific period. It helps identify overbought and oversold conditions and divergences between the price and indicator, which can signal potential price reversals. For a trend to keep going, traders would want the price to move in line with the RSI. If the price is making higher highs in an uptrend, one would want the RSI to do the same (which is the case with BTC right now). Price and RSI doing different things (e.g., a higher high in price but a lower high in RSI) would signal a divergence and could indicate the reversal of a trend. It is worth noting, however, that Bitcoin is approaching the oversold territory (above the 70 level) on the RSI, which some traders use as a sell signal. On the other hand, some traders also view the oversold area as a bullish sign and only use the presence of a price divergence in the oversold area to exit a trade.  

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Ethereum

Though Bitcoin has been doing quite well, Ethereum (ETH) and other altcoins haven’t been as lucky. ETH against the USD still ranges between the $2,150.00 and $2,770.00 levels, showing a lack of strength. It is currently testing the midpoint of its range at $2,460.00. Something much more interesting in the ETH chart would be the diagonal trendline it is testing, which dates all the way back from its June 2022 lows. Holding this trendline as support could push ETH to once again target the $2,770.00 level and even potentially break it to reach the $3,670.00 level. 

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Bitcoin Dominance 

Ethereum and other altcoins’ situation can be seen in the Bitcoin Dominance (BTC.D) chart. Despite reaching major resistance at 58.33%, the chart continued pushing upwards. It has currently broken out of the 60.00% resistance and is headed towards the 61.51% level. As long as BTC.D continues to trade inside its upsloping channel, the chart will remain bullish, and BTC will continue to outperform altcoins. 

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Fear and Greed Index

The Crypto Fear and Greed Index is another helpful indicator during times of great emotion. It gauges the sentiment of the market, checking if investors are feeling fearful or greedy. Currently, the market participants are feeling greed which means that they believe prices will continue to rise, though they are still not entirely certain. When the indicator shows that people feel extreme greed, it is usually close to the market top. When trading the Fear and Greed Index, it is usually best to go against the majority sentiment. However, note that the markets can stay greedy for a long time as prices continue to rise. 

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Final Thoughts 

Breaking past $70,000.00 once again definitely got people bullish and hopeful of reaching $100,000.00 and beyond. While breakout trading is a strategy, it isn’t always successful and should definitely not be used when buying investments. A better time to load up would be when markets pull back a little (such as right now). Whether or not this correction is short-lived, it is important to manage risk and to make sure that one always has a trading plan. Keep trading and try to make the best of the markets! 

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