Whereas Bitcoin (BTC) was hovering at $6,500 earlier this calendar week, information technology has since rebounded to the resistance zone of $7,800 but failed to break it on the first attempt.

Crypto market daily performance

Crypto market daily operation. Source: Coin360

Equally the brusk term trend is still upwards, should traders exist cautious well-nigh the recent price action? Allow'due south have a expect at the charts.

Bitcoin yet within the downwards channel

The more notable timeframe — the daily in this example  — is however showing a downwards trending aqueduct since the summit at the cease of June 2022.

BTC USD daily chart

BTC USD daily chart. Source: TradingView

This downwardly trending channel is still active every bit the price bounced back from the "support" line and the 0.618-0.65 golden ratio Fibonacci level earlier this week.

The green zone around $vi,500-6,800 tin notwithstanding be seen equally a significant support level hither, while the up red/yellow area is showing pregnant resistance. The resistance area is in the $8,000-8,200 zone, which is besides around the trendline of the downwardly channel.

The total crypto market cap rejected at first resistance

Total crypto market capitalization daily chart

Total crypto market capitalization daily chart. Source: TradingView

The total market capitalization of crypto is showing a similar view as BTC/USD at this point. The market place cap held the green zone as support — which is crucial — but couldn't break the first resistance.

The overall marketplace cap chart often provides a more unobstructed view than Bitcoin regarding cost movements and, in this case, is also showing some clear signals.

Total market capitalization chart

Full marketplace capitalization nautical chart. Source: TradingView

In this regard, the price retraced to the earlier resistance in Apr of this yr.

Currently, the price has tested whether that level tin exist confirmed support and did but that with a bounce from $175 to $207 billion. Still, the first resistance at $207 billion was rejected, which suggests a potential retest of the purple surface area is in social club.

If the purple area manages to concur, the total market capitalization is moving inside a vast falling wedge pattern, which is likely to break out in January 2022.

Start resistance rejected at smaller time frames

BTC USD 4 hour chart

BTC USD 4 hour chart. Source: TradingView

The BTC price has seen a surge of $1,300 during the week from $6.5K. However, information technology was not able to break through the next resistance at $7,800. But why is this a central resistance level?

The left side of the chart shows that the toll bounced several times at this support level before it bankrupt down. Such a level is a reference point for traders looking for selling opportunities (or opening shorts), and thus, the price reversed and confirmed the $seven,800 level as resistance.

Before this test occurred, the price first flipped the $vii,350-7,400 resistance into support. In this regard, the price is now stuck in a range, where these numbers are at present defining the bounds.

Is that bad? No, the price has been hovering inside such a range for the entire month of October before volatility kicked in.

Bullish scenario

BTC USD bullish scenarioBTC USD bullish scenario. Source: TradingView

Now, several scenarios can exist classified as bullish or bearish on multiple timeframes. As long as $vii,350-7,400 remains support in the near term, another push towards the red/yellow area can occur with a target of $8,000-8,300.

Personally, I am not expecting to see an firsthand breakthrough as that would be the get-go endeavour to exist testing this resistance. Normally, resistances don't get cleaved on the first attempt.

For the bulls, breaking and flipping this $8,000-8,300 level into support would exist platonic, which would also cause the price to break out of the downtrend. If the price is not able to practice this, it will go on to motility inside this downwards aqueduct.

Surly scenario

BTC USD bearish scenario 1

BTC USD bearish scenario 1. Source: TradingView

Now, I will explicate multiple surly scenarios equally a few different ones are possible. The offset scenario is a breakup towards $7,350-seven,400 area for a test of support (as that's a pregnant support expanse).

A potential weak bounce to $7,700 can occur from this level of back up, which I'd classify as a curt opportunity earlier the price is ready to break downwards to $6,900-7,000 surface area.

BTC USD bearish scenario 2

BTC USD surly scenario two. Source: TradingView

The second bearish scenario is classified as bearish and bullish at the aforementioned time. Why? Well, if the price tin can hold the $7,350-7,400 and bounce significantly from it, another push button to the upper resistance zone can be expected.

Still, if the cost is non able to break through $8,000-8,300 again, so that would be a great curt opportunity before some other movement downward towards $7,000.

In this case, some more upward momentum could occur. Though, I'd be personally looking to curt rather than long here at these levels should this scenario play out.

Conclusion

As a whole, contempo toll activity has presented a nice v-shaped bottom that occurred at the $six,500 level through which the 0.618-0.65 Fibonacci level and trendline held upward.

However, does it hateful that the downwards pressure is over for now? I don't think and so. To ostend a bottom, I volition be expecting some more than backtests of lower levels in the $half-dozen,900-vii,000 region (dark-green zone) in the coming months.

Nevertheless, the macro perspective is nevertheless bullish, and in this regard, I still see this retracement as a macro "buy the dip" opportunity if the dark-green zone effectually $6,500-6,800 tin can concur.

The views and opinions expressed hither are solely those of the author and practice not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You lot should bear your own research when making a decision.