#27 07 Feb 2022
BTC bounced in the zone pointed out last week and also broke out of the descending trend that we had since the last top in November.
If we take into consideration what happened in previous market cycles, there is a high probability for BTC to achieve the purple box which is coincident with the MA20W and also inner 161 Fibonacci level.
That zone, in case we will achieve it, should have to act as a big resistance level.
Regarding Dominance, the MA20W stopped the movement slightly, but it looks like it wants to continue its ascending move.
That implies that BTC will win over most of the alts, even if alts are winning over fiat.
ETH Bounced in the main GP (golden pocket/yellow box) and also around the zone of the blue box. Like BTC it should have to achieve at least the purple zone, also the MA20W level.
TOTAL MARKET CAP INDEX
Same history for the overall market. All bounced in the main GP and now the descending trend has been broken. The first resistance will be the purple box if things go as it should.
We reduced the number of levels in the chart and only posted the main ones. There are a few inner levels where the price can retrace a bit, but the most important one is purple.
ALTCOIN MARKET INDEX
The altcoin market cap bounced in the lower side of the channel and also main GP. That, however, has not broken out the descending trend yet.
In case it broke up, we could see a reversal in the BTC Dominance, giving momentum to the altcoin market.
That said, the purple box and the MA20W are pretty near of the Break-Out zone, so we should have to be cautious on that levels.
In the last market update, we pointed out that we were near a bounce zone.
That was because we were in the main GP zone in almost all charts and also because all the markets were extremely oversold.
The market tends to punish those who do not have a plan as usual, after most of the retail investors panicked and capitulated, we saw the bounce.
This movement has not changed the main descending trend and for the moment it is just a pullback up to the local GP which are the purple boxes that we explained above.
In this kind of market, we used to achieve the purple box and then we have 2 possible scenarios:
1. We are rejected on the purple box, which means bearish continuation.
2. We are able to break out the purple box which would be a bullish movement and then we have more possibilities to achieve the next resistance which is the orange box.