Bitcoin (BTC) price breached the crucial level of $ 35,000 and continued to rise above $ 40,000 on February 6, just days after MicroStrategy offered Bitcoin to more than 14,000 companies.
This break above $ 35,000 earlier this week was significant as it opened the door to a new test ever. A recent hurdle at $ 40,000 kept BTC from an all-new high, while several all-time highs were created by altcoins over the past week.
In fact, the cryptocurrency market is parabolic as most investors have seen significant increases in their portfolio sizes. However, the rally in DeFi alts, in particular, is at risk of overheating as momentum may swing back to Bitcoin as BTC returns in excess of $ 40,000.
Moreover, will the Chicago Mercantile Exchange (ETH) futures list change market momentum next week, or will Bitcoin continue its rally? Let’s take a look at the graphs.
Bitcoin should break the final resistance before new all-time highs
The 4 hour chart of Bitcoin shows an impressive breakout above $ 35,000, resulting in a healthy continuation towards the $ 40,000 mark. During this range, the $ 38,000 level gave a slight rejection but was not categorized as a huge resistance area
The $ 38,000 level took its test during Elon Musk’s pump, as Bitcoin’s price rebounded dramatically the same day. So, if Bitcoin breaks through $ 35,000 again, it is not surprising that we see a continuation to $ 40,000 rather than another reject at $ 38,000.
This $ 40,000 zone is the last hurdle to break before new all-time highs. However, this new strength in Bitcoin means that its market dominance recovers at the expense of most altcoins.
Is Bitcoin’s dominance ready to explode?
Bitcoin dominance chart is a nice diagram that shows how market cycles work. In recent years, bitcoin topped the dominance in December, followed by a rise in altcoin led by Ethereum. This was accompanied by a significant drop in BTC’s dominance in January.
This trend has been repeated again this year with altcoin trading parabolic, reaching all-time highs with Bitcoin standardizing into a range.
However, each half ends, and altcoins will correct. Historically, a temporary low was seen in February, after which bitcoin’s dominance rose slightly. This rise in dominance will be in line with a possible correction in ETH price.
Ether CME futures will begin Monday February 8th, after which the correction should not be surprising. This is exactly what happened with Bitcoin CME futures in December 2017. This list marked the top of a bullish cycle and the start of a bear market for several years.
Therefore, an Ether correction may also come as the focus shifts back to Bitcoin, especially as Ethereum gas fees reach ridiculous levels. This shift will significantly increase Bitcoin’s dominance.
What are the following points of interest for Bitcoin?
Bitcoin daily chart can be used to determine Bitcoin’s next price targets. If Bitcoin price can break through the $ 40,500 area, the following points of interest can be identified with the Fibonacci extension tool.
Using this indicator, the most popular Fibonacci level is the 1.618 Fibonacci level. This level puts the potential bitcoin price target of $ 50,000, once it breaks the last high.
However, bitcoin has seen a huge spike in recent months already. So a clear breakout above the previous all-time high should be combined with a clear support / resistance reversal of this level. Otherwise, a continuation of the limited-scale construction would likely occur, as history shows.
In the trolley above, bitcoin price tried to break above recent highs (after halving) but was unsuccessful, resulting in more range. However, a clear breakout above an all-time high above $ 42,000 should push Bitcoin’s price up to $ 50,000.
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