Bitcoin rally potentially topping out as price stalls amidst bearish divergences
Bitcoin has been losing momentum around $20,900 and is starting to top out around $21,300 as bearish divergences begin to form on price spikes. Liquidity is mostly trapped around $16,900 - $17,500, and we can expect a correction in the near-term.
On-chain data also indicates inflows of BTC to exchanges while stablecoin reserves dropped.
Meanwhile, the S&P 500 is breaking through a resistance trendline and crossing 4,030. Currently, it sits on top of the resistance trend line but seems to be heavily overbought. If this rally continues crypto will also follow. DXY sits at support on 102.3 and a bounce from here could form a double top around 110.
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Bitcoin Technical Analysis
Bitcoin remains on an upward trajectory, however, with a slower pace and lower volume, other than that we can also see divergences on multiple indicators signaling distribution and buyer exhaustion. Liquidity maps also highlight lower price levels as an area of interest. We might not get a correction today, but we will most likely see volatility in the coming days as this rise in price with exhaustion is unlikely to continue for much longer.
Ethereum Technical Analysis
Ethereum is following a similar pattern with an upward trajectory but decreasing volume, however, the candle bodies are longer than on Bitcoin. This is due to the high open interest with Ethereum. At best when this low volatility range breaks out it can try to test $1,650 and reject from resistance, or directly head down to $1,210 - $1,270 which is the liquidity zone for Ethereum.
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Disclaimer: None of the information here constitutes financial advice and market participants are advised to conduct their own research since cryptocurrencies are speculative assets with considerable risks.