Bitcoin climbs 5% from recent lows but crypto rally lacks depth
BY
Ben Graham
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Bitcoin has been rallying back slowly but steadily since reaching an intermediate bottom last Friday at $108,600 (it is currently trading about $5,000 higher, or close to 5%).
Risk assets are enjoying a mixed but decent session for the most part, particularly in the tech sector. The sentiment is spreading to cryptocurrencies, but here's the catch:
Only the most significant altcoins by market cap are up or around unchanged in today’s session, while smaller altcoins are selling off.
Memecoins are also caught in the mix, providing a fairly unusual outlook for the digital asset market – even on differing scales, cryptos tend to move in tandem.
Market depth is when a general market gets dragged upwards, and most of the components of the market are also rallying.
A lack of depth is seen when only a few names drag the asset class.
This was seen in Equities throughout the first part of the 2023 rebound, when the Mag 7 dragged the market higher before the bull market spread elsewhere, and today, cryptos are doing the same.
Let's take a look at Bitcoin to see what's going on there.
Read More:
A multi-timeframe Bitcoin technical analysis
Bitcoin (BTC) Daily chart
The latest rebound has taken Bitcoin out of a less-favorable price action, but there is still work to to:
A double-top marked just after marking a new ATH showed a weak acceptance of the $120,000 level, which tends to be a sign of consequent reversal in technical analysis.
The market holding around $110,000, the preceding all-time highs, was a sign of decent appetite and a healthy pullback overall.
However, markets then formed lower highs after the Powell's Jackson Hole speech which also got rejected quite aggressively.
Let's now turn to today: The $107,800 lows marked on September 1 faked-out below the key support before rallying again, and today's rebound marks a higher low, inverting the bearish sequence.
One positive aspect to look for later is that momentum (RSI) is now far from overbought and going back towards positive from just below neutral.
Bulls will have to break above the current range, let's see the details of that range just below.
Bitcoin (BTC) 4H chart and levels
Despite the price action from today, the outlook is more one of a range rather than a continuation of the preceding trend.
But consolidation is still a good sign for the overall market, as holding above $100,000 marks price and volume confirmation, where participants agree at prices that are way superior to preceding years.
Breaking above the most recent $117,500 high would relaunch the odds of reaching higher levels.
Bears may enter on a break of the most recent lows ($107,600 on September 1).
Levels to place on your BTC Charts:
Support Levels:
Resistance Levels:
Safe Trades!
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