Bitcoin entered the bottom of its support range yesterday, making this an important inflection point for traders. The recent pullback brought BTC inside the daily TBO Cloud for the first time since November, signaling bearish consolidation.
However, demand remains evident as volume holds steady. BTC's drop of -11.73% over the past three days is more significant than mid-November's -9% pullback, yet still mild compared to the -18% to -28% pullbacks seen during the 2020 bull run. Weekly RSI has also dipped below overbought levels, leaving room for recovery should BTC bounce before the weekly close.
Ethereum and Altcoins Under Pressure
Ethereum's repeated rejections at the $4,000 resistance have proven costly, with a TBO Close Long printed on yesterday's daily candle. While daily RSI is nearing oversold levels—indicating a potential entry point—the broader trend remains weak, as ETH struggles to maintain bullish momentum.
Altcoins have been pummeled during this pullback, with many charts showing severe damage. However, OTHERS.D, which tracks smaller-cap cryptocurrencies, is showing early signs of a potential bounce as RSI resets from oversold levels. For altcoins to recover meaningfully, Bitcoin dominance (BTC.D) must reverse its bullish trend, which has yet to happen.
Stablecoin Dominance and Market Sentiment
Stablecoin dominance printed a TBO Close Short yesterday, mirroring the conditions seen in March before prolonged market choppiness. While RSI for stablecoin dominance is overbought, indicating a potential shift in sentiment, the chart remains bullishly consolidative inside the daily TBO Cloud. Traders should remain cautious and watch for further confirmation of a bearish reversal in stablecoin dominance before assuming market-wide recovery.
The Impact of Broader Markets on Crypto
This week's FOMC meeting sent shockwaves through TradFi, with the US Dollar Index (DXY) rallying strongly. A rising DXY often signals bearish conditions for stocks and cryptocurrencies, and this week's move is no exception.
The S&P 500 saw its steepest single-day drop since August, while gold's -2.3% decline reflects easing geopolitical and financial concerns. These dynamics have undoubtedly played a role in Bitcoin and altcoins' extended pullback.
Looking Ahead: Opportunities Amidst Consolidation
Despite recent volatility, Bitcoin remains macro bullish. The TBO Slow line continues to angle upward on higher timeframes, and historical context reminds us that pullbacks during bull markets create significant buying opportunities. Dominance levels, particularly BTC.D, will be key indicators for altcoin recovery. As BTC consolidates near support, traders and investors should remain patient and vigilant, using this pullback to position themselves for the next leg up in this ongoing bull market.
