KuCoin Weekly Technical Overview: Bitcoin’s Recent Resistance Turns Into Support

2021/09/06 10:06:45

The $2 trillion cryptocurrency market is on the run to the upside that does seem to stop anytime soon. After an everlasting consolidation for over three months or above, most of the coins have resumed their predominant uptrend. The buyers that were subdued by the sellers at the technical supply areas are finally attempting to break through them with momentum on their side too. Not to mention, as most cryptos have gradually made higher high sequences on the smaller time frames, a few tokens have rallied such that the mid-May crypto crash appears to be minuscule relative to their current bull run.

Unlike always, not all coins are in correlation with each other. Of course, the overall trend of most coins lies in the same direction; their inner price action and patterns are skewed. In other words, the concept of leaders and laggards is highly in play based on the current trend.

Leaving the rest of the altcoins aside, the biggest two cryptos themselves are having a cycle of leaders and laggards. There are days/weeks when Bitcoin outperforms Ethereum and vice versa. However, the fact that the chief trend is in the same direction should not cause concern for the crypto bulls.

Bitcoin Price Update

The $49,000 level has been a significant hurdle for the bulls to breach through it. Formed on Aug 21, the buyers seem to be struggling to break and hold above it despite the power they brought from the support levels. With the pressure from the bulls, the price did inch above the $50k mark but got rejected in no time. These failures did cause a reason for concern as the price action depicted a downtrend in the subsequent sessions.

Due to the minute demand around the $49,000 level, the price dropped to lower levels, as anticipated. From the recent highs of $50,380 in the last week of August, they slipped 7%, coming all the way down to almost $46,000 within a couple of days. However, the price headed back up to the resistance level, indicating that the discount was indeed accepted by the buyers.

Currently, the price has inched up to the $50,000 level, as the game of negotiation is in play.

Ethereum Breaks Out while Bitcoin Holds

Correlation is among the best tools to understand the performance of a cryptocurrency and, to an extent, predict its upcoming move as well.

A trillion-dollar approaching Bitcoin crypto is the first and one-of-a-kind digital asset. But when it comes to comprehending its price action relative to other cryptos, Ethereum is usually taken into account. Typically, ever since Ethereum got into the mainstream, the price movement of BTC and ETH has been quite similar. Even today, with thousands of Ethereum-like altcoins, the top two currencies still go in sync.

Bitcoin Price Chart on the Daily Timeframe | Source - BTC/USDT

But the trajectory of the coins since the beginning of the recent uptrend has been a race between the two. Initially, Bitcoin was the first one to breach above the long-held resistance of $40,000. At the same time, Ethereum was yet to break its supply zone and go past it. But as BTC started to slow down due to profit-taking, ETH got into the game with the buyers firmly going through the resistance zone, bringing Ethereum and Bitcoin back to sync.

As both the markets were retracing since the second week of August, Ethereum went on to lead as it made the next impulsive move, before Bitcoin. In fact, Bitcoin is still unable to breach through short-term highs, though ETH is over 25% from its recent consolidation highs.

Ethereum Price Chart on the Daily Timeframe | Source - ETH/USDT

Is the Wait Finally Over for Bitcoin?

The Bitcoin market set a resistance precisely at $49,300 on August 21 – fifteen days, as of writing and the consolidation is still in play. Bitcoin clearly seems to be struggling to head north with momentum despite its correlation pair making a move.

That being said, it does not change the fact that the buyers are evidently holding their support levels. The nearest support at $48000 has been holding firm ever since its establishment. The market did attempt to breach below it a couple of times, but the bulls shot it back up both times out of no surprise.

Analyzing the pushes from the support level, it is observed that the buyers got stronger as the price headed higher on their second move up. Additionally, the overextending resistance at $49,300 turned into support as the buyers began to hold above it.

Bitcoin Price Chart on the 4-Hour Timeframe | Source - BTC/USDT

Conclusion

A laggard does remain the same over time. At some point, if the power from the big players exists, it will certainly make a move to become a leader pair. Similar is the case with Bitcoin. Considering its correlating peep ETH breaching through its resistance level, and the buyers (in BTC) getting stronger every step of the way, the bias keeps getting heavier on the buy side, leading to a breakout very soon. Stay tuned and watch the KuCoin Blog for more interesting and valuable educational content. All the best!

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