Bitcoin Battles 2-Month Resistance Amid ‘Most Hated’ Stock Rally
Bitcoin (BTC) pierced the top of a stubborn trading range on August 11 as a decidedly difficult rally took hold in risk assets.
Bitcoin retracement warnings intensify near $25,000
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting highs of $24,750 on Bitstamp, marking its best performance since June 13.
The pair had attempted several breakouts to the top of the range in the previous weeks, all failing in the face of heavy selling pressure.
However, new US inflation data released this week provided a long-awaited catalyst for change, with Bitcoin and altcoins rising in line with stocks as the consumer price index (CPI) for July suggested inflation had peaked.
On August 10, the day of the release, the S&P 500 and Nasdaq Composite Index rose 2.1% and 1.9%, respectively. BTC/USD, on the other hand, saw a daily candle around $900.
Instead of putting on their optimism, market commentators were anything but bullish as the dust settled. Sentiment, noted investor Raoul Pal, treated the post-CPI rally as a black sheep.
“Well, this looks to be one of the most hated rallies I’ve seen in quite a few years in stocks,” he told Twitter followers in a dedicated thread.
Still, Pal argued that there was a “very decent chance” that stocks had seen their June lows.
Forecasting a big change of tune in crypto, meanwhile, popular Crypto trader and analyst Il Capo stuck to $25,500 as the maximum likely target before another downtrend begins.
Almost there. pic.twitter.com/2pjpUgw85T
— il Capo Of Crypto (@CryptoCapo_) 11 August 2022
“$BTC pumped almost 40%. Big opportunity, tracking coming. Buy The Dip,” Jibon co-accounts continued in further Twitter comments.
A slightly more hopeful Crypto Tony in the meantime so that hodlers would be “in for a treat” if the range high managed to hold.
After seeing potential similarities between the Bitcoin chart now and in March 2020, BTCfuel added that a further breakout is not out of the cards.
The #Bitcoin The March 2020 bull trap and crash is quite similar to the current setup. Bitcoin seems to be breaking out right now pic.twitter.com/WkITQ2G7py
— BTCfuel (@BTCfuel) 10 August 2022
Doubts emerge about Ethereum rally
Meanwhile, the impressive performance across altcoins put the biggest altcoin Ether (ETH) in the spotlight after ETH/USD surged over 11%.
Related: Bitcoin Dominance Hits 6-Month Low as Metrics Proclaim New ‘Alt Season’
The pair continued its gains on the day, passing $1,900 for the first time since June 6 and now approaching the psychologically significant $2,000 mark.
The CPI momentum added to an already exciting Ethereum market, with the Goerli testnet merge – a key preparatory step for the full Merge event in September – concluding successfully.
“Since the start of this bear market rally, in mid-June, Ethereum has gained dominance in terms of trading volume relative to Bitcoin. Over the past few days, Ethereum and Bitcoin Dominance have even crossed,” wrote Maartuun, a contributing analyst at on -chain data platform CryptoQuant, in a blog post on August 10.
Maartuun warned that historical precedent nevertheless did not favor a sustained rally across crypto should this continue to be led by ETH.
“It’s clear that Ethereum is very popular on exchanges because of its ever-increasing dominance. It makes sense because of the upcoming 2.0 merger,” he continued.
“However, from my 5-year experience in the crypto market, the rally led by Ethereum is usually not the healthiest for the market. As you could already read in my previous analysis, I am very conservative. Especially because Ethereum has already made a > 100% movement from the lowest.”
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