Last week, the total crypto market capitalization surged over 40% to reach a high of $267 billion. During this time, approximately $77 billion was injected into the market. Bitcoin jumped over 42% while Ethereum and XRP rose nearly 30%. Despite the bullish impulse, these cryptocurrencies entered a consolidation phase and could be on the verge of a significant breakout.
After a massive $3,150 upswing that occurred between Oct. 23-26, bitcoin seems to have stabilized within a trading range. This area is defined by the lower and upper Bollinger bands that sit around $9,055 and $9,450, respectively. As the Bollinger bands squeeze, indicating low volatility, they foresee that a period of high volatility could be underway. Trading between these support and resistance levels poses high-risk exposure and must be considered a no-trade zone.
If bitcoin moves below $9,055, the selling pressure behind it may increase, taking it to $8,550 or $7,900. On the other hand, a spike in volume that allows this cryptocurrency to break above $9,450 could be succeeded by a further upward advance to $10,000 or $10,800.
CCN.com reached out to Michaël van de Poppe, a full-time trader based in Amsterdam, to gather his opinion about the current state of the market. The technical analyst believes bitcoin has bottomed out and already begun a new uptrend.
According to van de Poppe:
“Bitcoin has bottomed out of the correction wave and is in a ‘range’ period right now. This means that the period is seemingly comparable with February-March of this year in which Bitcoin makes some concise movements up or down, to continue [going up] afterward.”
Under the current conditions, van de Poppe expects that BTC could retest the $8,600-$8,800 area before breaking upwards. The upswing could push this cryptocurrency towards $11,000, concluded the analyst.
Like bitcoin, Ethereum entered a consolidation period after the sudden spike it experienced between Oct. 23-26. Since then, Ethereum has been mostly trading between $180-$188.
The low level of volatility ETH is experiencing forced the Bollinger bands on the 4-hour chart to squeeze. This technical index estimates that a strong breakout will occur if the squeeze prolongs for an extended period.
Thus far, the Bollinger Bands have been squeezing for over a week; if this cryptocurrency moves below $180, a further correction to $170 or even $160 is likely to happen. Conversely, surging above $188 could trigger an increase in demand for Ethereum, resulting in a move to $197 or $213.
Nonetheless, van de Poppe noticed that Ethereum recently broke out of a falling wedge pattern. This is a technical formation that usually estimates a trend reversal from bearish to bullish. As a result, a spike in volume could take ETH to $230, said Michaël.
“Ethereum broke out of a falling wedge structure, which was massive due to the support and resistance flip of $160. I’d be wanting to see whether $173-175 holds as support. If it does, we can start targeting upwards levels around $230,” added the technical analysis specialist.
The recent upswing seen across the entire market allowed XRP to bounce off the bottom of an ascending parallel channel that has been developing on its 4-hour chart since Sept. 26. Even though the sudden increase in volume got this cryptocurrency to hit the top of the channel, it was not strong enough for a further advance. XRP then pulled back to the bottom of the ascending parallel channel and continues to trade around this area since then.
If XRP breaks below the lower parallel line of the channel, it could plunge to $0.266 or $0.24. However, van de Poppe stated that this cryptocurrency could likely benefit from the “Swell FOMO,” like it always does.
As explained in a previous article, Ripple’s Swell is an invite-only annual conference that brings together some of the most prominent figures in the financial services and payments sector. XRP could skyrocket in anticipation of the announcements that will be made during the event, which takes place between Nov. 7-8.
A close above the $0.30 resistance level could allow XRP to jump to $0.47, as stated by the 40-years trading veteran, Peter Brandt.
After last week’s upswing, the top three cryptocurrencies by market cap have been staggered within a trading range. As a result, their volatility decreased substantially in the last few days. CryptoVince, a well-known trader in the crypto community, told CCN.com that, at the moment, the market is giving “mixed signals.” Due to this fact, Vince believes that the overall sentiment is neutral.
“I want to see if buyers can defend Bitcoin’s price above $9,000 and if it can stay above the 200-day moving average. If not, I will be looking at the daily breaker block around $8,000. On the other hand, in case of a bullish breakout, I would like to see BTC holding above the 100-day moving average,” added CryptoVince.
Based on these various perspectives, it seems like it will be wiser for investors to wait for confirmation before entering a trade.
Disclaimer: The technical analysis above should not be considered trading advice from CCN.com. The writer owns bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in different cryptos but does not engage in short-term or day-trading.