The crypto market has performed well in the last week in an upward direction, registering around 8% gains in the investor’s portfolio. Crypto enthusiasts have witnessed an eventful week as inflation data and the Shanghai upgrade favor investors.
According to the Bureau of Labor Statistics report on April 12, the United States Consumer Price Index (CPI) rose only 0.1% in March. This was less than expected as it had increased by 0.5% in February. Following this news, market king Bitcoin gained 1.6% on April 13 with a sustainable momentum above $30K.
Weekly Chart of Crypto Market Capitalization
The overall crypto market cap drew three bullish candles on the weekly chart. However, the bears found a significant dominance zone near 1.27 trillion (mentioned above the chart), as this zone was a crucial demand zone from February 2021 to May 2022.
For the past three weeks, the trading volume bar displayed a dominance of buyers. But the week started with a red trading volume bar, which is suggesting that the bears may take over the market for a short period of time before rebounding. In terms of retracements, the weekly RSI has also turned negative, and it might revisit the 56 level — ascending trendline’s support area— before bouncing back.
The Current Price Action
However, the crypto market appeals in a bullish trend for longer-term aspects as BTC climbed to its 10-month high as well as 2023 high of $31,170 on April 14, and Shapella upgrade in Ethereum last week, extended the bullish rally in ETH up to 13.97%.
Conversely, for a short term outlook, Bitcoin price failed to hold the top and it declined today. Meanwhile, BTC is correcting lower after breaking the neckline of a head and shoulders pattern (green) on the 4-hours price chart. The bears successfully dragged the BTC cost below $29,800 as it is currently trading at $29,538 against the US Dollar.
A retracement in BTC could further fuel the weak market sentiment. This retracement could return bullish near the $28,700 area due to an ascending support area. As of now, the RSI has crossed into the highly oversold zone and the MACD is about to enter the negative zone, showing short-term negative signals.
Can the Minor sell-off drag the overall Crypto Market Cap down to $1.17 Trillion?
Due to the dominance of Bitcoin, a pullback of $1000 points in BTC could lead to a short-term drop in crypto market capitalization – around 3.5%. Currently, the crypto cap stands at $1.22 trillion with an intraday loss of 1.72%.
According to the SAR indicator and the 21 SMA, sellers may continue to dominate the market till the $1.7T level, while the bulls have a pivotal support area at this level. Specifically, the daily RSI is heading lower from the oversold region and may be taking support at an ascending trendline.
The ongoing retracement phase in the crypto market can fuel another healthy bullish trend and start the long awaited alt season, if the crypto market takes the uptrend support.
