The past week has been a turbulent week for the cryptocurrency market, as Bitcoin (BTC) fell from US$36,000 midweek to US$29,000 and then recovered most of its losses. BTC is trading at $31,000-32,000-this is a key support range that can determine the activity of the cryptocurrency market in the coming weeks.
Most altcoins followed BTC throughout the week without independent breakthroughs. In this turbulent situation, traders may avoid using leveraged positions.
Due to concerns about China’s crackdown on BTC miners and lack of support from top institutions, BTC fell below $30,000 in the middle of the week. JPMorgan Chase strategists believe that the overall signal continues to be bearish on BTC. Options worth about US$6 billion expired on Friday, causing the market to fall by 8% overnight.
Since the beginning of January, BTC has been showing a Wyckoff pattern and may now enter a growth phase. Breaking the $42,000 mark will be the key to a full bullish divergence. If this happens, altcoins may grow disproportionately.
In terms of adopting news, Paraguay will become the second country after El Salvador to propose a bill authorizing Bitcoin as legal tender. On Friday, El Salvador announced that they would distribute $30 worth of Bitcoin to every adult in the country. BTC will become the legal tender of El Salvador on September 7. The country has seen many developments in the cryptocurrency field, including 1,500 BTC ATMs, geothermal BTC mining, and foreign investment in the country.
Microstrategy is the largest institutional buyer of BTC, and earlier this week added $500 million worth of BTC to its portfolio.
BTC has created lows in a small time frame (<4H) throughout the week and is in an ascending channel (long-term bearish mode). But at lower levels, it is a descending channel (long-term bullish). In the next few days, it will be decisive for BTC to trade sideways for a period of time or continue in the downward channel and then break through it, leading to bullish divergence.
The chart of BTC dominance (BTC’s share of the overall market) has been rising recently, which indicates that the dominance may decline significantly in the coming weeks, indicating strong growth in altcoins.