Bitcoin (BTC) made a sudden jump of eight% yesterday and is currently hovering at effectually $7,300. As the price bounced from $vi,900, a higher low is presenting itself on the chart, just does this mean that the lesser is there?

Crypto market daily performance

Crypto market daily functioning. Source: Coin360

Bitcoin still stuck in sideways range and downtrend

BTC USD 1-day chart

BTC USD 1-24-hour interval chart. Source: TradingView

The price of Bitcoin is even so moving inside this down channel since last year's high of $xiii,900. Remarkably, the price corrected towards the "Golden Pocket" Fibonacci area (0.618-0.65 level) and is currently showing a potential college depression.

The green area is as well a meaning area from 2022, as that was the zone the price of Bitcoin bounced on for vi-months.

Given that the price bounced from $vi,900 to $7,400, there's ownership pressure shown from this area, indicating that the cost might exist bottoming inside this range.

Linear chart showing potential wedge structure

BTC USD 1-day linear chart

BTC USD 1-day linear chart. Source: TradingView

The linear nautical chart shows similarities with the log scale chart. However, there's more than of a falling wedge structure rather than a channel. Pregnant that the price is gathering force for a breakout through the coming weeks, marking this level as a bottom expanse.

The chart is also showing a bullish divergence, which marked the temporary low at $6,500. More often than not, bullish divergences marker a trend reversal (likewise seen in the December 20228 low at $3,100).

If cost maintains this red box as new support and a higher low is established, then Bitcoin could face a rally towards $9,000 over the coming months.

Full market place capitalization hovering at support

Total market capitalization 1-day chart

Total market capitalization 1-solar day nautical chart. Source: TradingView

Similar signs prove the total market capitalization chart, which has retraced to April 2022 levels. A test was confirmed by a abrupt bounce upwards, followed past a potential college low structure equally we speak. Bated from these signals, a substantial bullish divergence potentially marked the lesser of this retracement.

This retracement is currently hovering around the 0.618-0.65 Fibonacci level equally well (similar to Bitcoin). If market capitalization tin maintain this higher low and consolidate on this level, a breakout to the upside of this falling wedge looks more likely than further downside momentum.

Crypto fear & greed index

Crypto fear & greed index. Source: Alternative.me

Usually, when an asset is marker a temporary acme, the sentiment is euphoric and greed becomes palpable. The contrary effect is the case around bottoms. People are usually scared and depressed as they are expecting farther downwards momentum. The Fright & Greed Index has been showing fear for the last weeks, indicating that the overall marketplace sentiment doesn't wait a breakout to the upside.

Is such a sentiment warranted?

The toll is still moving due south, which means that some fear is warranted in the market. Notwithstanding, every bit the price is trying to bottom hither, it would be interesting to look at potential upside momentum rather than further downwards. The same can exist spotted on altcoins, for example, Ethereum (ETH).

ETH USD 1-day chart

ETH USD 1-solar day chart. Source: TradingView

The ETH chart is showing a similar wedge formation as the Bitcoin and total marketplace capitalization charts, meaning that a breakout to the upside is likely to occur in the next calendar month. Bated from that, the cost bounced from a back up surface area hither and is potentially making a lesser formation.

ETH BTC 2-day chart

ETH BTC 2-24-hour interval chart. Source: TradingView

On the BTC chart, many altcoins are facing a long term downtrend. Ether, for example, is in the midst of a ii-year old downtrend that information technology must break out of. Interestingly, the months of Jan/February accept historically seen Ether price significantly increase and/or breakout of downtrends.

During 2022, a similar breakout was shown, after which 2022 repeats the same move. First, a bottom germination includes a bullish divergence. After this, a higher low is marked, followed by a breakout to the upside.

In 2022 and 2022, a significant movement to the upside was seen in the ETH/BTC pair as well, though no breakout of the general downtrend occurred. This time it'due south possible, however, every bit Ethereum Classic (ETC) and Bitcoin Cash (BCH) are already breaking their downtrends that take been in place for ii years.

The bullish scenario for Bitcoin

So what must Bitcoin price do now to generate such a breakout to the upside?

BTC USD bullish scenario

BTC USD bullish scenario. Source: TradingView

Equally discussed previously in the article, the cost needs to maintain the blue area as a college low and not driblet below it. As long as that level is sustained as back up, a breakout to the upside is probable to occur. This would cause the vi-calendar month former downtrend to suspension to the upside, which potentially ways the end of the downward momentum.

The targets based on previous support/resistance and Fibonacci levels commencement include $8,000. If that's broken, the toll is ready to aim for $nine,100-9,500, which would typically shift the sentiment from fear to neutral.

The surly scenario for Bitcoin

BTC USD 1-day bearish scenario

BTC USD i-day bearish scenario. Source: TradingView

A bearish scenario can be warranted through the reverse of the bullish scenario and is pretty basic. If the price of Bitcoin is not able to hold the blueish surface area every bit back up, the bullish departure is not confirmed, and the price is ready to continue downwards.

In that regard, a potential retest of the $half dozen,900 level would grant an splendid short opportunity, and then the side by side support zones can be found in the $half-dozen,200-half dozen,500 surface area.

The views and opinions expressed here are solely those of the author and exercise not necessarily reverberate the views of Cointelegraph. Every investment and trading move involves risk. You should bear your own inquiry when making a decision.