Can the Crypto Market Bounce? | Credit: Veronica Cestari
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Key Takeaways
The cryptocurrency market is currently trading within a descending wedge pattern.
Altcoins have formed a double bottom pattern at the support level.
Can the cryptocurrency market rebound despite its bearish long-term trend?
The crypto market is slipping into a long-term bear market, breaking down from long-term support levels that are critical for a bullish structure.
Still, short-term setups, especially on the daily time frame, leave the door open for a relief bounce before any deeper pullback.
The main question now is whether these structures can lead to a temporary rebound.
Can the Crypto Market Bounce?
Last week’s crypto market breakdown was a decisive sign that the bull market has come to an end.
After completing a five-wave upward movement with a diagonal for wave five, the crypto market broke down from its ascending wedge and the $3.60 trillion support area.
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Momentum indicators are also decisively bearish, since the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) both created divergences (orange).
So, the wave count, price action, and indicator readings all suggest that the upward trend has ended and a bear market has begun.
The two closest support levels are at $2.92 and $2.50 trillion, respectively, created by the 0.382 and 0.5 Fibonacci retracement support levels.
The bearish divergences in the RSI and MACD support this assessment, since they preceded the breakdown and often lead to a sustained downward trend.
Once the Bitcoin Dominance falls to 58.50%, the reaction will determine whether the future trend is bullish or bearish, and whether there is hope for a minor altcoin season.
Dead Cat Bounce Incoming
The long-term structure across crypto, altcoins, and Bitcoin dominance suggests a long-term bear market. Nevertheless, several bullish short-term patterns remain in play.
A rebound from current support zones could offer a brief relief rally before the larger downtrend resumes. However, such moves are likely to be short-lived.
If TOTALCAP holds its wedge or altcoins rise from a double bottom, a short-term bounce in the crypto market may occur. However, the broader trend remains bearish.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
