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Majors push up as crypto markets enjoy relief
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Positive sentiment has been flowing this past week as big cap cryptocurrencies rallied, but we're not out of the woods yet.
Bitcoin taps on 4k
We previously discussed Bitcoin’s bull flag formation and the potential for a breakout.
After a series of higher lows, Bitcoin (BTC) broke out of the bull flag and rallied up for a 10.7% move to 3,985 USD.
While BTC was unable to surpass the even 4,000 USD mark on the USD pair, it did hit 4,015 USDT on the USDT pair.
Last week, we also looked at the image below, which may indicate that a bearish pennant is forming on the higher time frames.
This formation is important because a bearish pennant typically breaks to the downside with a price target that is close to the length of the pole.
If BTC were to complete this bearish pennant, it could result in a major bearish rally.
We noted that the red trendline was a key indicator and that a strong close above it could be a catalyst for a sustained upward rally.
This past week’s bullish movement has successfully pierced the descending trendline, so it’ll be interesting to see how BTC reacts over the coming weeks.
Support and resistance levels routinely swap roles, so it wouldn’t be surprising to see BTC test this previous resistance to find support. If BTC tests this trendline and fails to find support, that would be a very bearish sign for the market.
Ethereum could push further
Ethereum (ETH) has been on a bullish tear lately – and the trend continued this past week.
After starting the week off in the 124 USD range, ETH rallied about 20% up to 149 USD.
Like BTC, ETH appears to be consolidating following strong upward momentum with a series of higher lows.
Without any major sell-off so far, ETH and the rest of the majors could be gearing up for another wave to the upside before a major correction and retest of the high timeframe descending trendline occurs.
XRP follows the rally
XRP had been consolidating heavily on the 4-hour chart and a breakout looked likely. Indeed, XRP rallied along with BTC and ETH for a 17% gain up to 0.34522 USD.
After a much-needed bullish relief rally, the cryptocurrency market is in a prime position to kickstart a trend reversal.
BTC has successfully broken through the descending trendline, which started in mid-November.
Over the next few weeks, the same trendline will be a key level to pay attention to.
If BTC can bounce off the trendline, a bullish reversal could very well be in order.
On the contrary, if this rally ends up being another failed reversal attempt, a drop could be imminent.