Bitcoin (BTC) surged 5% in its latest rally, bouncing back after testing the $77,000 CME Gap. However, despite this temporary recovery, the broader bearish trend continues to dominate as BTC remains below the key daily TBO Cloud. One encouraging sign is the emergence of a second TBT Bullish Divergence signal on the daily close, a pattern that previously preceded a major Bitcoin recovery in September 2023. While this hints at a potential trend reversal, it may take a few more weeks for BTC to stabilize and confirm a new upward trajectory.
Additionally, the Relative Strength Index (RSI) did not slip into oversold territory on Monday’s close, reinforcing the divergence between price action and RSI. A fresh CME Gap has also formed at $84,790, presenting a short-term target for BTC. If this level is reached, Bitcoin may aim for $89,000 next, aligning with the TBO Fast Line.
Bitcoin’s Short-Term Resistance and Trading Range Expectations
Despite its recent gains, Bitcoin faces strong resistance at $89,000. The extensive sell-off over the past three weeks makes an immediate return to $109,000 unlikely. Instead, BTC is more likely to consolidate within an $80,000–$93,000 range over the next two to three months. This extended stabilization phase would be a healthier response to market conditions rather than a sharp parabolic recovery.
Ethereum Struggles Amid Bitcoin’s Resilience
While Bitcoin shows early signs of recovery, Ethereum (ETH) continues to lag. ETH/USD remains under heavy bearish pressure across multiple timeframes, with significant losses sustained since December. Ethereum’s inflationary tokenomics have added to its downward pressure, with some analysts suggesting that adjustments, such as a more aggressive burn mechanism, could help stabilize its price. Until then, ETH remains one of the weaker-performing large-cap cryptocurrencies.
Stablecoin Dominance Rejection Hints at Crypto Recovery
Stablecoin dominance saw a sharp decline, coinciding with the crypto market’s broader rebound. Notably, it was rejected at TBO Resistance at 8.22%, signaling a potential shift away from stablecoins and back into riskier digital assets. The RSI for stablecoin dominance also retreated from overbought levels, reinforcing the likelihood of further declines. If stablecoin dominance continues falling, it would confirm a return of investor confidence in the broader crypto market, supporting potential upside momentum.
Bitcoin Dominance Faces Resistance, Signaling Market Consolidation
Bitcoin dominance rose 1.65% over the past two days but now faces key resistance on the four-hour chart. The BTC Dominance Index (BTC.D) has printed multiple TBO Close Long signals, suggesting that a period of consolidation is more likely than an immediate breakout.
In contrast, the Top 10 Dominance Index has displayed strength, closing in the green while maintaining an RSI pattern of higher lows. However, smaller-cap altcoins remain under pressure, with the OTHERS.D index struggling beneath a critical resistance level. A breakout above this zone is necessary for smaller altcoins to gain momentum.
Crypto Market Cap Shows Early Signs of Strength
The total cryptocurrency market capitalization has started to recover. Despite Monday’s TBO Breakdown, the strong green close on Tuesday is an encouraging sign. The weekly chart indicates an upside target of approximately $2.97 trillion, a 12% increase from current levels. If this recovery gains traction, it could significantly bolster investor confidence across the crypto market.
The BVOL7D volatility index is also reversing from the Rejection Zone, which historically precedes short-term rallies in altcoins. This trend could play out over the next one to two weeks, providing further support for crypto assets.
Bitcoin vs. Gold: Key Reversal Signal Emerges
Bitcoin’s price relative to gold has printed a TBT Bullish Divergence signal on the daily chart. The last two occurrences of this pattern—May and July 2024—marked major market bottoms and triggered substantial recoveries. If history repeats, Bitcoin may be in the early stages of a significant rebound.
Altcoins Show Initial Signs of Stabilization
Several altcoins are beginning to stabilize, but sustained recovery depends on increased trading volume. Solana (SOL) remains near the lower end of its range, requiring strong momentum to reclaim lost ground. Its first key resistance stands at $140.
Ripple (XRP) has shown notable resilience despite broader market weakness, maintaining a position above the daily TBO Cloud with a strong on-balance volume trend. Cardano (ADA) is also displaying relative strength, with short-term targets set at $0.78 and a longer-term resistance around $0.99.
Aptos (APT) remains structurally sound, but like most altcoins, it requires consecutive green candles and higher trading volume to confirm a full trend reversal. Meanwhile, Litecoin (LTC) has printed an RSI Reset on the daily timeframe, suggesting a potential bounce toward $107.
Could Crypto Recover Ahead of Traditional Markets?
Traditional financial markets continue to experience selling pressure, but crypto has already been in a downtrend for nearly two months. Given Bitcoin and altcoins’ extreme oversold conditions, there’s a strong possibility that the crypto market could recover ahead of equities.
Key Takeaways: Stay Disciplined Amid Market Volatility
While early signs of recovery are emerging, patience remains key. Bitcoin and the total crypto market cap hint at potential upside, but a meaningful rally will only materialize if trading volume increases. Altcoins are attempting a bounce but remain vulnerable to further declines.
The best approach in this market environment is to remain disciplined, take profits early, and adhere to a structured trading strategy. While the odds of a bullish reversal are rising, volatility remains high, and traders should remain cautious of potential short-lived recoveries.
