In the ever-changing world of cryptocurrency, staying ahead of market trends and understanding key signals is crucial for any investor or trader. Bitcoin, the flagship of the crypto market, is currently showing signs of short-term weakness, while Bitcoin dominance continues to hold a critical support level. This dynamic is casting a shadow over the altcoin market, which is struggling to find bullish momentum. Ethereum, Solana, XRP, Sui, and Chainlink are all displaying important technical patterns and warning signs that every crypto enthusiast should know about.
Let’s dive deep into the latest Bitcoin and altcoin market analysis, uncover the technical signals shaping the near future, and explore actionable insights to help you navigate these volatile times.
Understanding Bitcoin’s Current Price Action and Technical Signals
Bitcoin remains the barometer for the entire cryptocurrency ecosystem. Its price behavior, momentum, and dominance over altcoins tend to dictate the market’s overall mood. Right now, Bitcoin is caught in a short-term bearish trend but is bouncing off a specific support level. Let’s break down what the charts are telling us.
Weekly Bitcoin Chart: A Major Warning Signal
On the weekly Bitcoin price chart, the super trend indicator remains green, signaling that the larger bull market is still intact. However, there’s a looming threat: Bitcoin is nearing confirmation of a significant bearish divergence on the weekly timeframe. This divergence occurs when price makes higher highs but momentum indicators, like the RSI or MACD, fail to follow suit and instead make lower highs.
Historically, such bearish divergences have preceded meaningful pullbacks. For example:
- The last bearish divergence led to a two-month pullback.
- A previous divergence resulted in a one-to-two-month correction.
- And notably, a major bearish divergence in 2022 marked the onset of the bear market.
If Bitcoin confirms this divergence with the weekly candle close, it could signal more pronounced weakness ahead.
Three-Day Bitcoin Chart: Bearish MACD Crossover Looming
Zooming into the three-day Bitcoin price chart, the MACD is approaching a bearish crossover—a point where the MACD line crosses below the signal line, indicating increasing bearish momentum. The last few times we saw this, Bitcoin either experienced a short-term pullback before resuming bullish action or entered a deeper correction phase.
This suggests Bitcoin may face a slowdown or retracement in the short term, reinforcing the caution signaled by the weekly chart.
Cup and Handle Pattern: Still Alive but Fragile
Technically, Bitcoin has been forming a cup and handle pattern, a bullish continuation pattern that traders often watch closely. However, this pattern will be invalidated if Bitcoin breaks below $110,000—a scenario that currently looks plausible given the short-term weakness.
Given the lack of bullish momentum and the bearish signals, it’s wise not to rely heavily on this pattern for now.
Daily Bitcoin Chart: Resistance and RSI Bearish Trend
On the daily timeframe, Bitcoin is running into strong resistance between $120,000 and $123,000. This resistance zone has prevented the price from moving higher in recent weeks.
In addition, the daily RSI (Relative Strength Index) has been trending bearish for over a week, indicating weakening momentum. Historical trends show that when the daily RSI behaves like this, Bitcoin often experiences further pullbacks lasting days to weeks.
Four-Hour Bitcoin Chart: Short-Term Bearish Trend Confirmed
The four-hour Bitcoin chart shows a clear short-term bearish trend, characterized by lower highs and lower lows. There’s a descending resistance line around $119,000 and a descending support line near $114,700. Bitcoin is currently finding support at this level, which is a short-term positive.
However, the prevailing trend remains bearish, and a retest of previous highs around $110,000 to $112,000 could be imminent, which aligns with the potential pullback scenario.
Liquidity Heat Map: Key Levels to Watch
The Bitcoin liquidation heat map highlights a major liquidity zone between $120,000 and $121,000. Liquidity zones attract price action as traders execute stop-losses and take profits. Despite attempts to push towards this zone, Bitcoin has struggled due to weak bullish momentum.
While this liquidity remains a magnet for price, the current environment suggests Bitcoin will remain in a short-term bearish trend before any substantial upward move.
Bitcoin Dominance and Its Impact on Altcoins
Bitcoin dominance measures Bitcoin’s market capitalization relative to the entire cryptocurrency market. It’s a critical indicator for altcoin traders because when Bitcoin dominance rises, it usually means altcoins are underperforming.
Currently, Bitcoin dominance is bouncing off a crucial support area, maintaining its strength despite the bearish divergence still technically active. This is an important insight: while Bitcoin price shows weakness, Bitcoin dominance is holding firm, which spells trouble for altcoins.
Many in the crypto community are optimistic about altcoins right now, but the data suggests otherwise. When Bitcoin dominance is strong or bouncing from support, altcoins tend to be bearish on average. This means most altcoins are likely to underperform Bitcoin and face downward pressure.
Why Bitcoin Dominance Matters
- Bitcoin bullish dominance: Bitcoin is outperforming altcoins, meaning altcoins are generally weaker.
- Bitcoin price weakness + dominance bounce: Indicates altcoins are even weaker compared to Bitcoin.
- Altcoin rallies: Usually happen when Bitcoin dominance falls, showing altcoins gaining relative strength.
Given the current scenario, it’s prudent for traders to be cautious with altcoins and consider the broader market dynamics at play.
Ethereum: A Massive Warning Signal
Ethereum, the second-largest cryptocurrency, is showing strong signs of resistance and bearish momentum.
Rejection at Key Resistance Zone
On the three-day Ethereum chart, price is rejecting a significant resistance zone between $3,900 and $4,100. This rejection confirms the difficulty Ethereum faces in breaking higher, which has been a consistent theme over the last one to two weeks.
Daily Chart: Key Support Levels and Bearish Divergence
Ethereum is currently testing a critical support zone between $3,500 and $3,600. A candle close below $3,500 could trigger a pullback toward $3,200 to $3,300.
Moreover, Ethereum is playing out a bearish divergence on the daily chart for the first time since June. The last time this happened, Ethereum experienced a pullback of nearly 20-30% over about two weeks.
Currently, Ethereum has only retraced about 9%, indicating there could be more downside ahead.
Why This Matters for Traders
Many traders have been bullish on Ethereum and altcoins, buying at resistance zones with high risk of rejection. However, the technical evidence suggests it’s more sensible to look for short opportunities rather than longs in the current environment.
In fact, some traders, including myself, have already taken short positions on Ethereum in recent days, aligning with the bearish outlook.
Solana: Testing Key Support After Rejection
Solana, a popular altcoin, is also showing signs of weakness after facing rejection at resistance.
Resistance and Price Target
Solana is rejecting a key resistance zone between $190 and $200. The price is currently testing a support level at around $167, which has been a target for weeks.
Potential Downside Scenario
If Solana breaks and closes below $167 on the daily chart and fails to reclaim that level, the next likely support target is between $143 and $146.
This presents a possible shorting opportunity for traders if the breakdown is confirmed.
XRP: Bouncing from Fibonacci Support but Weekly Bearish Divergence Looms
XRP’s price action is a mixed bag, with short-term support holding but longer-term bearish signals emerging.
Weekly Chart: Bearish Divergence Confirmation Possible
XRP may confirm a second bearish divergence signal on the weekly chart soon. This divergence shows higher highs in price but lower highs in the weekly RSI, a strong warning sign.
Bearish divergences on the weekly timeframe often lead to sideways consolidation or pullbacks lasting weeks to months.
Daily Chart: Strong Fibonacci Support
On the daily chart, XRP is currently bouncing from a key Fibonacci support level around $2.90 to $3.00. This support has held perfectly as of the time of writing.
What to Watch Next
If XRP breaks below this support with daily candle closes under $2.90 and fails to recover, the next support zone to watch is around $2.55 to $2.62.
For now, I’m not interested in shorting XRP because the support is holding, but if it breaks, a short position might become viable.
Sui: History Repeating with a Significant Bearish Signal
Sui, a rising altcoin suggested by many in the community, is showing a textbook bearish divergence on the daily chart.
Bearish Divergence and Price Action
Sui’s price is making higher highs, but the daily RSI is making lower highs, confirming a bearish divergence. This pattern closely resembles what happened in May, which led to a major pullback lasting one to two months.
That previous pullback was about a 40% decline from high to low. Currently, Sui is down roughly 20%, suggesting the correction may only be halfway through.
Potential Trading Strategy
Before entering a short position, I’d wait for a daily candle close below $3.55, which is a key Fibonacci support level. If that breaks and flips to resistance, it would signal a good short entry targeting the next support near $3.09.
Conversely, if Sui holds above $3.55 and bounces, it might be wise to wait for a better entry point.
Chainlink: Confirmed Breakdown and Bearish Trend
Chainlink has confirmed a break below a critical support zone between $17.50 and $18.00, closing below $17 on the daily chart.
Implications of the Breakdown
This confirms a bearish trend in the short term, aligning with the broader altcoin weakness.
Resistance is now expected to form at the previous support zone ($17.50 to $18.00), which may act as a ceiling for price rallies.
Next Support and Short Opportunities
The next major support to watch is around $15.50, which could be a target for short positions or profit-taking.
Like with Sui, I recommend waiting for any short-term bounce to play out before entering shorts, to optimize entry points.
How to Prepare for These Market Moves
Given the mixed but largely bearish signals across Bitcoin and altcoins, how can traders and investors position themselves?
Setting Up for Trading Opportunities
If you want to capitalize on these moves, it’s essential to be ready on a reliable crypto exchange. Personally, I use Bitunix (BTNX) and Two Bits, both no-KYC exchanges that offer great bonuses for new users.
- Bitunix: Offers up to $40,200 in trading bonuses and $200 in deposit bonuses.
- Two Bits: Hosting a $3,000,000 trading competition with a chance to join my crypto world team for free.
Using the links to these exchanges can get you set up with bonus funds, allowing you to trade with more capital and reduced risk.
Trading Both Bullish and Bearish Moves
Whether prices are rising or falling, there are always opportunities to profit in the crypto market. It’s important to understand how to trade both long and short positions and to manage risk carefully.
For those new to trading, consider learning how to:
- Profit from bullish and bearish price action using long and short positions.
- Navigate choppy or sideways markets for consistent gains.
Mastering these skills helps you stay profitable regardless of market direction.
Wrapping Up: Staying Prepared in a Volatile Market
The crypto market is entering a phase where caution and strategic thinking are paramount. Bitcoin’s short-term bearish trend and looming weekly bearish divergence suggest potential pullbacks. Meanwhile, Bitcoin dominance holding steady is a warning sign that altcoins may struggle even more.
Ethereum, Solana, XRP, Sui, and Chainlink each show critical technical signals—ranging from bearish divergences to confirmed breakdowns—that traders should watch closely.
For traders, this environment calls for patience, readiness to seize shorting opportunities, and careful risk management. For investors, it might be a time to reassess positions and prepare for volatility ahead.
Remember, no matter the market conditions, there are always opportunities to profit if you stay informed and disciplined.
Stay tuned to updates and keep your trading toolkit sharp.
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