Wow, what a difference 24 hours makes! After the largest correction of this bull market and a sea of red, this morning brings a sea of green and recovery. Yesterday we saw a little glimmer of recovery but bitcoin and most altcoins were still looking like they could roll over at any time and continue the downward slide. In contrast, at least so far this morning bitcoin looks much stronger and many of the altcoins are making very strong moves up.
Bitcoin 4-hour Chart
I'm loving what I am seeing so far this morning but we have to remember that this is crypto where things can change in an instant. Looking at the 4-hour chart we can see that bitcoin spent most of yesterday forming a bottom but it was still up in the air as to whether or not the bottom had actually been reached. You can see that over the last 8 hours BTC has really started pushing higher, although still has a lot of work ahead to get back up to the levels it was at before the dump. One thing that I really like is that bitcoin finally touched the weekly 21 EMA, I have been expecting that to happen for quite a while.
Bitcoin Daily Chart
Looking at the daily chart you can see just how much work bitcoin has in front of it. Bitcoin has all of the moving averages above it that it must push through. Looking at this chart one thing that I really like is the long-legged doji candle. It forms a very bullish reversal pattern, what I want to see for confirmation is for the price to push above the high of the doji candle.
Bitcoin Monthly Chart
Looking at the monthly chart you can see that this correction brought the price down closer to the 7 EMA. I feel like this is important because the price had become very extended above the 7 EMA. It's still too early to tell but I am hopeful that this sharp correction could be just what bitcoin needed to propel it up and out of the consolidation phase it has been in for over 2 months. However, I don't believe this will happen overnight, bitcoin has a lot of work to do to just get back up near $60k but I am cautiously optimistic.
Ethereum 4-hour Chart
So, now let's take a look at the Ethereum 4-hour chart. You can see just how strong of a recovery ETH has made. After the initial drop, it bounced but then rolled over again and then bounced again near the first low forming a double bottom. ETH has pretty much gone straight up after the second low. Time will tell but I feel it is only a matter of time before bitcoin once again takes control and leads this market higher.
Bitcoin Market Dominance vs Altcoin Market Dominance
The last chart we will look at is the comparison between bitcoin's market dominance vs the altcoins market dominance. You can see that both have pushed well into my caution zones and both are within 5% of their extremes during the 2017 bull market. It's pretty obvious to me that the market dominance levels for this cycle are going to be very different from the 2017 cycle. I still feel that bitcoin has not peaked for this cycle so if that is indeed the case we should see a very large bounce in bitcoin's market dominance as it surges higher and as a result a large drop in the altcoin dominance.
Even though things look much better this morning it is still early in bitcoin's recovery but as I said earlier I am cautiously optimistic that the recovery will continue and we will see a new all-time high in the near future.
I hope you are all having a great Friday and that you have a great weekend!