Bitcoin (BTC) has seen some consolidation below $ 50,000 as a psychological barrier. However, during this retreat, several large altcoins have risen in price, suggesting that the alt season is not over yet.
In the meantime, the price of Bitcoin is facing a crucial resistance that needs to be broken, while Ether (ETH) has already cracked this resistance, hitting a three-month high against BTC and heading for the next resistance around the all-time high.
The main question now is whether this ether breakout is a signal for Bitcoin to follow suit and break the resistance barriers in September. Historically, September has been a corrective month, which means that such a breakout could surprise many traders.
Critical resistance zone at $ 51,000 to break for Bitcoin
The daily chart for Bitcoin shows a consolidation between $ 44,000 and $ 50,000. This consolidation resulted in a big breakout of altcoins in the markets as some were already breaking through their previous all-time highs.
The resistance is very clear with Bitcoin. If BTC can break this resistance, a large impulse move is likely, similar to the breakout above $ 6,000 earlier in this cycle.
The bearish divergence in the chart is only confirmed when the recent higher low is invalid and broken down. At this point the upward trend is officially reversed.
Currently, the market is consolidating after rallying from the July lows of BTC. In other words, the bearish divergence will remain unconfirmed until Bitcoin loses the lower bound of the support range, which can be found at $ 44,000.
The total market capitalization envisages new highs
The total market capitalization of the cryptocurrency shows a bullish continuation with consistently higher lows and higher highs.
The key breakthrough for the market cap breakthrough is the resistance zone around $ 2.12 trillion. Once broken, more upside is likely to be expected towards new all-time highs. This structure could also anticipate the course of Bitcoin, as this chart is currently showing even more bullish behavior than BTC / USD.
Ether breaks the key level of $ 3,400
The daily chart for ether shows a breakout above the key breaker at $ 3,400. This is a signal of strength for the entire market. The difference between Bitcoin and Ether right now is that ETH is making higher highs while Bitcoin remains in a sideways range.
On this chart, the critical breaker for Ether is the previous resistance zone at $ 3,400. As long as this maintains support, a continuation towards all-time highs becomes increasingly likely.
However, if it breaks below $ 3,400, a potential bearish divergence comes into play, leading to a correction to $ 2,600. Such a correction would also affect Bitcoin, which also has some critical levels to consider as support.
Critical levels to watch out for in Bitcoin
The chart for Bitcoin has been showing a slight downtrend since its recent high at $ 50,300. However, the chart also shows significant support at $ 46,400, which could prevent further downtrend to $ 44,000 and below.
Such a correction could hurt the markets and push the entire market to lower levels, which could mean Ether could drop below $ 3,400.
On the flip side, if Bitcoin stays within that range between $ 44,000 and $ 51,000 (in the lower time frames, $ 46,400 is also an essential level), conditions for altcoins to rally will only get better.
Until bitcoin doesn’t go vertical or has a significant surge of momentum, altcoins are in a good position to outperform BTC in the short term, and that’s what the market is seeing right now.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.