Bitcoin gained 5% yesterday after filling the $77K CME Gap, but the overall trend remains bearish as BTC continues to trade below the daily TBO Cloud. Despite this, a second TBT Bullish Divergence signal appeared on the daily close, indicating that a potential reversal is forming. Historically, the last time Bitcoin printed this signal on the daily time frame was in September 2023, just before a significant recovery. This suggests that while Bitcoin could still take another couple of weeks to fully reverse, early signs of a bottoming process are appearing.
Another promising sign is that RSI did not fall into oversold conditions on Monday’s close, reinforcing the divergence between price action and RSI. Additionally, a CME Gap has formed at $84,790, which could serve as a short-term target. If Bitcoin moves to fill this gap, the next logical target would be $89K, which aligns with the TBO Fast Line.
Short-Term Resistance and the Likelihood of Range-Bound Trading
If Bitcoin manages to push higher in the coming days, a return to $89K seems likely. However, the broader damage from the past three weeks of selling makes a rapid recovery back to $109K unlikely. Instead, Bitcoin is more likely to trade within a range of $80K to $93K for the next two to three months. This type of extended consolidation would be a healthier response to the recent sell-off rather than an immediate parabolic recovery.
Ethereum Continues to Underperform Bitcoin
While Bitcoin has begun to show signs of resilience, Ethereum continues to struggle. The ETH/USD chart remains deeply bearish on all major time frames, having lost significant ground since December. Despite its role as a leading blockchain, Ethereum’s inflationary tokenomics continue to weigh on its price. Some have suggested that turning off its inflationary mechanism and implementing a more aggressive burn model could help support price action, but for now, Ethereum remains one of the weaker large-cap assets in the market.
Stablecoin Dominance Rejected at Resistance, a Positive Sign for Crypto
Stablecoin dominance declined yesterday as the crypto market bounced higher. More importantly, stablecoin dominance was rejected at TBO Resistance at 8.22%. This is a strong bearish signal for stablecoin dominance, which in turn is a bullish signal for Bitcoin and altcoins.
Daily RSI for stablecoin dominance also fell from overbought levels above 70, reinforcing the likelihood of further downside. A continued decline in stablecoin dominance would confirm a return of risk appetite to the market, supporting further upside for cryptocurrencies.
Bitcoin Dominance Faces Resistance, Suggesting More Chop Ahead
Bitcoin dominance increased by 1.65% over the past two days, but it is currently testing TBO Resistance on the four-hour time frame. BTC.D has printed six TBO Close Long signals over the last five days, which suggests that further consolidation is likely rather than an immediate breakout.
Top 10 Dominance has shown greater strength, closing green yesterday with RSI maintaining a pattern of higher lows. However, the mid- and low-cap segment of the market continues to struggle. OTHERS.D, which represents smaller-cap altcoins, remains stuck beneath a stubborn resistance level. Until it can break above this area, smaller tokens will remain under pressure.
Crypto Market Cap Shows Early Signs of Recovery
The total cryptocurrency market cap is beginning to show signs of recovery. Despite a TBO Breakdown on Monday, yesterday’s strong green close is an encouraging sign of strength. On the weekly chart, total market cap has a logical upside target of $2.97 trillion, approximately 12% above current levels. If this recovery materializes, it would significantly boost confidence across the crypto market.
BVOL7D, a key measure of volatility, is also starting to reverse from the Rejection Zone. This typically signals a short-term bounce for altcoins, which could play out over the next one to two weeks.
Bitcoin vs. Gold Prints a Key Reversal Signal
Bitcoin’s price relative to gold has printed a TBT Bullish Divergence signal on the daily chart. The last two times this signal appeared—once in May 2024 and again in July 2024—it marked the bottom of a major downtrend. If history repeats, Bitcoin could be in the early stages of a significant recovery.
Altcoins Show Early Signs of Stabilization
Several altcoins are beginning to show signs of bottoming, but volume remains the missing ingredient for a sustained rally. Solana has fallen to the lower end of its range and has a long way to go before reclaiming lost ground. The first key resistance level to clear is $140.
XRP continues to show impressive strength despite overall market weakness. It has managed to stay above the daily TBO Cloud, with on-balance volume still trending higher. Cardano is also showing relative strength and is currently targeting $0.78 in the short term, with a longer-term resistance level around $0.99.
Aptos remains resilient, but like most altcoins, it needs consistent green candles and higher trading volume to confirm a true reversal. Litecoin has printed an RSI Reset on the daily time frame, suggesting a bounce back to $107 is likely.
Crypto Could Recover Before Traditional Markets
While traditional markets are still experiencing deep selling pressure, crypto has already been in a downtrend for nearly two months. Given the extreme oversold conditions in Bitcoin and altcoins, there is a strong possibility that crypto could begin recovering ahead of equities.
The key takeaway from this current market environment is that patience is essential. Bitcoin and the total crypto market cap are showing early signs of recovery, but meaningful upside will only be possible if volume increases. Altcoins are attempting to bounce, but many remain deeply oversold.
The best approach in the coming weeks is to remain disciplined, take profits early, and stick to a structured trading plan. The odds of a bullish reversal are increasing, but market conditions remain volatile, and any recovery could still be short-lived.
For those looking to refine their investment approach and navigate these conditions with confidence, The Complete Cryptocurrency Investor at Mastering Assets provides the essential tools and strategies needed to succeed.
