Volatility in the crypto market has increased this week. After falling since the end of February it has reversed the situation with an exponential move that has taken the price above the February highs in most assets and is represented in the total capitalisation chart, which after the weekly increase returns to the $1.15T resistance zone.
This resistance has not been overcome since June last year, making it an area of major importance for the future evolution of the market. In order to break it there has to be a significant increase in the volume of buying volume.
A similar situation can be seen in $BTC, which has generated an increase of +25% this week, being one of the tokens that has grown the most in the last week.
In the case of $BTC we have detected a high above the $25.5k resistance zone, thus generating the confirmation of a technical figure of trend reversal, an “Inverted Shoulder-Head-Shoulder”.
This formation, which is characterized by being formed in situations of market reversal, is formed by three fractals, where the second is higher than the first and the third (or lower if it is an inverse figure, as is the case) and create that similarity with a silhouette of the head and shoulders.
This figure is confirmed if there is a breakout of the neckline with an increase in volume and has its objective the same path of the fractal that forms the “head” from the moment of its breakout. But like all technical formations, it is not 100% effective, so we will have to keep an eye on its evolution, because if we see a low that breaks the $20k area, this figure will be invalidated.
Given this situation, the most likely scenario is to see a consolidation in this area of highs, as a pullback to the neckline, which continues to generate rising highs that can reach the $30k-$32k area, or even a bullish continuation without a pullback that reaches these targets. Although we must remember that this week is the FOMC meeting to announce the interest rate decision in the US, which may cause an increase in volatility that may invalidate our scenarios.
This move in $BTC has been accompanied by an increase in the dominance of BTC, which has broken the February high with strength and is on its way to test the next resistance at 49%, although as in BTC we cannot rule out the possibility of a pullback to the resistance broken at 45%.
This increase in dominance has generated $BTC to be placed in the top ten of the monthly ranking, just below some high volatility tokens that have reversed the situation that they had been dragging since the beginning of the month.
Among them, the gaming sector stands out, represented by $GALA with a weekly result of +36% and $YGG with +38%. Also noteworthy is the structure of other tokens such as Fantom ($FTM) which, despite generating an increase of +28%, has not managed to surpass the February high, as we can see in its graph.
This “divergence” detected in Fantom with respect to the rest of the market can have several readings. The first is an optimistic scenario in which $FTM generates an increase much higher than the market average, and could even reach $1 if it manages to break the resistance at $0.70. There is also the possibility that $FTM is alerting us to a weakness in its token, which could lead to a very pessimistic scenario, but which is currently less likely to occur.
Finally, remember that nothing discussed in our articles can be considered as investment advice. Everyone must do their own analysis and develop their own trading strategy. The BELOBABA team only shows analysis and investment tools, and how they help us in our operations when making decisions.