As most of you probably know by now, altcoin prices are strongly correlated to Bitcoin's price, so if all is well in the Bitcoin world, all tends to be well in the altcoin world, too, and vice-versa. To see whether or not we're actually going to enter a bear market soon, we need to look at how Bitcoin is doing right now.
I would say it's still quite difficult to actually predict where Bitcoin will be in a few weeks just looking at the current charts, but to me the trend still looks slightly more bullish than bearish. Here are five reasons why.
Bitcoin is still above the 50 Simple Moving Average (SMA) on the daily chart. We've only had some brief touchdowns going through the 50 SMA, but the bulls quickly pulled the price much above the SMA. We've had no openings or closes below the SMA in recent times.
Bitcoin has had the same support level since the beginning of May, and so far even panicking "whales" haven't managed to break it. It doesn't necessarily mean they never will, just that so far they haven't, and that's a good sign considering we can only work with the information we already have.
We keep having higher lows, on the support level, and a higher high as well (compared to the previous one). If the market was more bearish, we should have at least seen the highs keep getting lower. The new highs going higher shows a small ascending trend.
The current resistance level is only half as long-lived, which also means it's weaker than the support level and could more easily be broken.
Bulls are much closer to the resistance level than bears are to the support level. In other words, most people trade much closer to the resistance level than they trade near the support level. It's true that the bulls are more timid right now, and we don't see big spikes above in prices from them. However, the bulls now know the bears' weakness (not being able to break past that support line), and they may soon want to take advantage of it and become much bolder themselves.
A bonus reason I'm going to give is one based on fundamental analysis. I believe everyone is blowing the Bitcoin drama out of proportions, and that's what causing the market to dip, even if a little bit. However, if that fear is not based on something very real, then it's only a matter of time before everyone realizes it, and the bulls rally strongly once again. I think we may experience this before August.
Do you agree or disagree? Please elaborate why.
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