Bitcoin has seen two massive green candles on the 1-hour charts today, adding roughly $850 to its price. Bitcoin was trading sideways for most of the day, after moving up above the 0.5 Fibonacci, successfully finding support in that region, for the day. The next major resistance zone is at its next 0.618 Fibonacci or roughly $200 from its current trading position (depending on exactly where traders have set their Fibonacci highs and lows).
Bitcoin last tested this the 0.618 Fibonacci on the 28th June (2019), after reaching YTD (year-to-date) high in June, surging to almost $14,000. For Bitcoin to enter new highs for the year, it needs to break the last lower high after visiting $13,381, and to break the 0.618 Fibonacci, by closing its candle on the 1H, 4H or 1D above it. I allow some flexibility here depending on what institutions, who have a major effect on the market, are using for their analysis for the entrance and exit strategies.
The last time Bitcoin was trying to test and squeeze above the 0.618 Fibonacci, on July 4th (falling significantly short of that mark), Bitcoin’s dominance surged to a new high for the year at 63.10%.
Bitcoin’s YTD High for Bitcoin Dominance
Bitcoin’s dominance has been steadily increasing over the course of the day, as it regained momentum. It is currently sitting at a new year-to-date high of 63.4% (click here to find the chart on coinmarketcap). Since publishing, this has increased to 64.1%. This is an important measurement of where the money in the market is currently at. It indicates that money is flowing out of altcoins today and into the big brother Bitcoin. This is important, for two reasons: 1) It shows confidence in Bitcoin potentially being able to breach the next resistance point and 2) the volume is needed in order for Bitcoin to be able to retest new highs for the year.
The BTC dominance factor is not a be all end all factor, and does not guarantee by any means that Bitcoin will break its next resistance point and reach a new year-to-date high. It is possible that we are simply seeing FOMO kicking in, and people liquidating their altcoins so as not to miss out. If Bitcoin fails to break its next resistance point within the next 48 hours, we would likely be seeing this figure dropping again, with more liquidity entering into altcoins. This could see Bitcoin finding support or re-testing its support at 0.5 Fibonacci / $11,847.