The cryptocurrency markets have made a strong comeback in the past few days. That drove the total crypto market capitalization to $995 billion on Jan. 14, according to CoinMarketCap data. Bitcoin (BTC) led the recovery from the front and skyrocketed above $21,000 on Jan. 14.
After the sharp rally, the big question is whether the recovery is a dead cat bounce that is a selling opportunity, or is it the start of a new uptrend. It is difficult to predict with certainty if a macro bottom has been made but the charts suggest that a bottoming process has begun.
Crypto market data daily view. Source: Coin360
Independent market analyst HornHairs highlighted that the 2017 to 2018 bear market lasted for 364 days and from 2021 to the current market low, the duration is again 364 days. Another interesting similarity is that the 2015 to 2017 bull market and the 2018 to 2021 bull phase both lasted for 1,064 days. If history repeats itself, then Bitcoin may make the next top in roughly 1,000 days.
Bitcoin’s short term price action has been exciting for bulls but are there altcoins that are showing similar strength in the near term?
Let’s study the charts to find out.
Bitcoin shot up to $21,258 on Jan. 13 and that propelled the relative strength index (RSI) above 89, signaling that the rally was overheated in the short term. The bears are expected to mount a strong defense at $21,500.
BTC/USDT daily chart. Source: TradingView
Sometimes, when a trend change happens, the RSI may remain in the overbought territory for a long time. If the BTC/USDT pair does not give up much ground from the current level, it will suggest that traders are in no hurry to book profits as they anticipate another leg higher.
If buyers kick the price above $21,500, the pair could climb to $22,800. This level may again act as a major roadblock.
On the way down, the bears will have to drag the price below the psychological level of $20,000 to make a dent in the bullish momentum. The pair could then slump to the breakout level of $18,388.
BTC/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows…