Bitcoin (BTC) is testing a critical resistance zone between $44,100 and $44,500 following a breakout earlier this week. Despite the initial bullish sentiment, market analysts caution against potential sell-offs in the coming days.
The end-of-year festive season is expected to trigger accelerated profit-taking among investors. Additionally, the market has likely already factored in the excitement surrounding the anticipated approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, setting the stage for a ‘sell the news’ scenario.
A report from CoinShares reveals a notable shift in investor behavior. After weeks of cash inflows into Bitcoin investment products, a recent outflow of $33 million indicates a possible change in market sentiment.
Technical Indicators Suggest a Price Reversal
From a technical perspective, Bitcoin appears to be overbought. The daily Relative Strength Index (RSI) suggests a potential reversal. The formation of a triple-top pattern on the daily timeframe, coupled with a bearish divergence in the RSI, strengthens this view. Moreover, Bitcoin’s dominance in daily and weekly timeframes shows signs of waning, with emerging head and shoulder patterns around 53 percent. This reversal in dominance might signal the onset of an ‘altcoin season’ shortly.
Altcoin Market Cap Poised for Breakthrough
#Altcoin Marketcap is Breaking out 🚨
Last time we witnessed a breakout like this, the Altcoin Market Cap surged by 10x from $122 Billion to $1.7 Trillion
Right now, price is at $745 billion.
Even if it goes up by 5 times from here, it would put the Altcoin market cap over… pic.twitter.com/tNg1KV8BHT
— Mags (@thescalpingpro) December 21, 2023
After struggling to surpass the $700 billion mark for months, the altcoin market cap has successfully retested its recent breakout. It currently stands at approximately $745 billion. Considering the established four-year crypto cycle driven by Bitcoin halvings, the altcoin market capitalization is poised for a significant surge, potentially exceeding $2 trillion in the next 24 months. Altcoins like Solana (SOL) and Ethereum (ETH) are leading this bullish trend, already showing early signs of a strong upward trajectory.
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