The Sell in May and Go Away sequence put the crypto market under high fundamental and technical pressure, but the essentials had been preserved in extremis, the preservation of the pivot support zone of 24,000/25,000 dollars. The market has developed a bullish momentum this week which carries with it technical hopes of seeking new resistance.
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Le Bitcoin (BTC) devrait continuer de surperformer les altcoins
Bitcoin, leader of the crypto market
On the stock market, history has become accustomed to repeating itself and the crypto market is no exception to the rule. This bullish week on the price of bitcoin may surprise many because it goes against the current of the major stock market indices which have started a sequence of profit taking.
In reality, there is nothing surprising. The same situation occurs as during the bankruptcy of FTX in the last three months of the year 2022. At the time, the price of bitcoin had made a new low briefly dropping below $15,000 (on the futures contract), while risky assets on the stock market had started a new upward phase medium term from October 2022.
The price of bitcoin had then missed the mark, by being totally impervious to the return of the attraction for risk due to massive withdrawals from centralized platforms.
Over the May/June period, the same pattern repeated itself. The price of bitcoin has been unable to follow the bullish push of the major stock market indices. This was particularly the case for the Nasdaq, but also for the entire information technology sector compartment, which returned to its historic highs.
Stuck in its regulatory, legal and fund security difficulties, the crypto market was even tight as the US dollar downtrend resumed on the foreign exchange market. Yet, this top-ranking factor usually acts with an inverse correlation on the price of cryptos.
Therefore, the rebound in bitcoin price off the decisive support at $24,000/$25,000 should be read as a simple process of catching up and aligning with risky assets, like what happened last January.
Naturally, the encouraging signals coming from institutional participation (new annual high on the measure ofopen interest on crypto futures) give structure to this rebound. Moreover, if this is confirmed at the weekly close, then it would allow the engagement of new bullish targets.
As for altcoins, bitcoin should still outperform them with a BTC dominance target of 57%.
Graph made with the TradingView site and which shows the dominance of bitcoin in Japanese candles and that of Ethereum during the closing
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The next resistance: $33,000
The bullish movement that started last Friday on the price of bitcoin is interesting, although it is only a delayed return to the configuration of the equity market. In effect, this momentum allowed the exit from the top of the corrective compression in place since the beginning of May and is part of the fractal construction in place since the beginning of the year.
This is indeed the fifth identifiable upward wave whose theoretical target is at $33,000, or 0.618 extension of wave 3 carried over to the trough of wave 4. This target also corresponds to chartist resistance at $32,800, January 2022 lows, as well as a 50% retracement of the entire 2021/2022 bear market.
By conclusion, this is the bullish target as long as the new support at $28,800 is defended.
Graph made with the TradingView site and which reveals the weekly Japanese candles of the price of the BTC future contract at the CME
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Vincent Ganne is a market strategist, technical analyst, trainer on the stock market and speaker on BFM Business. With a long experience in the field of analysis, he offers a global approach to financial markets. Both from a macroeconomic point of view and from a microeconomic point of view. Vincent Ganne also uses many aspects of chart analysis with the aim of forecasting trends in financial assets over the medium and long term.
Vincent Gane
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