For the last few weeks, BTC has been in a downtrend. For the moment, it can still be considered a retest of the main GP (golden pocket/yellow box) as well as the last descending channel or MA20W.
As we can see in the small time frames, we have bounced tonight on the blue box pointed 2 weeks ago, as that was the level of the bear flag created for the big crash 2 weeks ago. Basically, we can see how movements work as movement “A” creates movement “B”.
Based on that assumption, movement “B” should have to create a countermovement at least until the border of the newly created falling wedge (inner purple box).
If that breaks out, we could see continuation until the new orange boxes in the bullish scenario but if, for instance, we are not able to break out of that inner purple box, the break-down of the main GP could bring us to a bigger bear trend continuation and to the lower blue boxes.
Dominance retraced into the blue box, interesting now is that it is retesting the lost ascending channel.
Re-entering inside could be a signal of altcoins to cool down but if that border rejects the dominance, we could see a retrace to the lower blue box creating bigger movements on altcoins.
ETH followed the descending trend like BTC and also arrived at the GP/golden pocket (yellow box) of the movement. We can see how ETH is following the BTC movements and levels. The first orange box is a possible reaction to the GP bounce.
As always, we need to see how resistance reacts to do further projections but: over the first orange box means bull continuation, rejection of the box means downtrend continuation.
ALTCOIN MARKET INDEX
Altcoin market went to GP (golden pocket) as well, where we now found support.
The same situation as explained before: First level, inner purple box, if at that point we are rejected, then downtrend continuation, but if that level breaks out, then we will see a probable altcoin bull continuation.
TOTAL MARKET CAP INDEX
The total market cap chart has exactly the same history. Bounce at GP and now probably going to retest at least the inner purple box.
We have been in a downtrend or retracement during the last 2 weeks. While some altcoins reached new ATH, most of them were not able to do it.
In general terms, the whole market has retraced to the main Golden Pocket which at the moment can’t be defined as a bearish movement but as a retracement to gain potential upwards momentum.
The end of this week will also give us some information about the possible close over/under the MA20W.
If that is able to hold, we could see that as bullish momentum continuation.
But if that is not able to hold the price, it could be a very bearish sign.
There is another external factor in play now that we need to follow-up on, which is the stock market. China is causing fear over all the markets due to its situation, and SPY and other indexes have noticed that. If we see more fear and more overreaction on the markets, BTC and the overall crypto market will follow.
Important to know is that yesterday and today, the Chinese market is closed for the Mid-Autumn Festival and tomorrow it will re-open. If tomorrow Chinese stock opens bearish, we could see a cascade effect on all the markets. For the moment, SPY has bounced on the MA20W, so that will also be another chart to look at at the end of the week to have more information for the next movement.