Bitcoin closed above the daily TBO Cloud yesterday, signaling a potential end to its recent -15% pullback. The daily RSI has rebounded, although it didn't close below 25 to confirm an optimal entry point. While this recovery is encouraging, both On-Balance Volume (OBV) and regular volume remain underwhelming, suggesting a lack of significant buying power. This may indicate that sell walls were removed, easing BTC's path upward.
The 4-hour TBT Bullish Divergence signal from earlier this week seems to have been accurate. BTC maintained bullish structure, with no lower lows breaking the pattern.
The weekly chart remains bullish, with RSI aiming to close back above 70, solidifying the broader uptrend. However, volume has decreased, a typical occurrence during the holiday season. Overall, Bitcoin remains macro bullish despite its recent consolidation phase.
Ethereum's Struggles Continue
Ethereum is still stuck inside its daily TBO Cloud, signaling bearish consolidation. Daily RSI is neutral, and volume remains lackluster. The daily TBO Slow line has flattened out, confirming ETH's lack of momentum.
On the 4-hour chart, a cluster of TBO Close Short signals suggests a potential reversal, but without significant volume, any recovery is likely to be muted. To regain bullish momentum, ETH must close above $4,000 with sustained demand, but for now, it remains in consolidation mode.
Dominance Levels Show Mixed Signals
Stablecoin dominance has paused within the daily TBO Cloud, signaling "bullish consolidation." The daily TBO Slow line is beginning to flatten, a concerning sign that stablecoin dominance could increase further, potentially signaling fear in the market. The weekly chart for stablecoin dominance remains bearish, and a retracement to 4.89% would indicate a return of greed to the crypto market.
Bitcoin Dominance (BTC.D) is testing a move back above the daily TBO Cloud, with the cloud itself starting to constrict.
Historical patterns suggest a possible long-term decline in BTC.D, reminiscent of its behavior in 2019 and 2020, when it saw a -17% drop over a year. However, fluctuations are likely, with BTC.D potentially retracing to 61% before a more sustained drop. The key signal to watch is the weekly TBO Slow line; once it flattens, it could indicate a shift in favor of altcoins.
OTHERS.D is still fighting to close above the daily TBO Cloud and could see a bullish reversal if the weekly TBO Close Short signal holds. However, a definitive breakout requires a weekly close above its long-term resistance line, in place since January 2022.
Market Outlook and Holiday Dynamics
As 2024 comes to a close, institutional trading desks are winding down for the holidays, reducing market volume. Retail investors are likely to drive market activity, potentially leading to artificial pumps in both BTC and altcoins. While BTC remains the dominant play, historical trends suggest that altcoins could see renewed bullish momentum between January and May.
The rapid retreat of BVOL7D from the reversal zone also supports the notion of an impending altcoin rally. However, sustained bullish momentum for altcoins hinges on Bitcoin dominance showing clearer signs of reversal, particularly with a flattening weekly TBO Slow line.
For now, the focus remains on Bitcoin's support levels, ETH's struggle to regain momentum, and the broader dominance dynamics shaping the market. With reduced institutional activity and a historically bullish Q1 ahead, the stage is set for an eventful start to 2025.
