Bitcoin has finally started to push out of the grueling range that has defined the market for weeks. Yesterday, BTC closed up 1%, bringing daily RSI to 45 and right up to resistance. The path ahead is clear: BTC must break through a series of successively lower highs that have formed since the all-time high at $109K. A daily close above $100K would be the first major step in reigniting bullish momentum, forcing short-sellers to cover their positions and triggering a broader move upward.
Institutional Demand is Pushing Bitcoin Higher
Recent data suggests that OTC supply of Bitcoin is drying up. Both MicroStrategy and BlackRock continue to buy BTC at a pace exceeding daily production. Once OTC desks run out of available supply, they will have no choice but to buy directly from exchanges, which will put immediate upward pressure on price. This is a textbook example of supply and demand mechanics playing out in real time.
Another positive sign comes from On-Balance Volume (OBV), which appears to have bounced off of a key support level on the 4-hour chart. This suggests renewed accumulation, a potential early sign of a broader trend reversal.
Ethereum Setting Up for a Short Squeeze
Ethereum remains one of the most controversial assets in the market right now. Reports indicate that speculators have built the largest ETH short position in history, setting the stage for a massive short squeeze. If ETH gains upward momentum, forced liquidations could fuel a sharp rally similar to what was seen during the GameStop short squeeze in 2021.
Additionally, ETH gas fees have dropped to record lows, signaling potential structural shifts in the network’s activity. The recent RSI Reset on the daily time frame suggests that ETH is poised for at least a short-term rebound, with a minimum projected move of 14% to around $3,051. However, resistance levels between $3K and $3,141 remain a major hurdle.
While demand for ETH still appears weak based on volume, a break above these resistance levels could quickly propel ETH toward $4K. That said, ETH remains in a long-term downtrend, and traders should remain cautious despite the short squeeze setup.
Bitcoin and Stablecoin Dominance Signals Market Shift
Stablecoin dominance appears to be topping out, a sign that traders may be moving capital back into riskier assets like BTC and altcoins. Daily RSI for stablecoin dominance peaked at 78.67 last Friday and has since dropped back below 70, indicating exhaustion in the flight to safety.
Bitcoin dominance (BTC.D) remains elevated but has started to cool off. With daily RSI retreating from an overbought level of 82.63, a pullback to 55% remains the ideal scenario for an altcoin resurgence. However, this process will take time, as both the daily and weekly TBO Cloud suggest that BTC.D is still in a long-term bullish trend.
Top 10 and Altcoin Dominance Showing Early Recovery Signs
The Top 10 Dominance chart has started moving higher following an RSI Reset last Friday. Though the recovery has been slow, bullish divergence signals on the 4-hour chart suggest a potential move to the upside.
OTHERS Dominance, representing smaller altcoins, has also printed a bullish divergence signal, and daily RSI is showing early signs of a rebound. The next critical test will be whether OTHERS.D can reclaim the 8.91% level, which now acts as resistance.
Total Crypto Market Cap Slowly Recovering
The total market cap of the crypto space is still recovering from last Monday’s crash. There are no major bullish reversal signals yet, but as long as BTC maintains its upward momentum, broader recovery is expected. The OTHERS market cap chart remains in a bearish trend below the daily TBO Cloud but is starting to show signs of reversal, with RSI approaching overhead resistance.
Meanwhile, BVOL7D, a key volatility indicator, dropped 16% yesterday and printed a TBO Close Long, a historically reliable bullish reversal signal for altcoins.
Traditional Finance Markets Support Crypto Growth
The DXY (US Dollar Index) daily chart is showing a TBO Cross Down in progress, signaling potential downside. While these signals are not always perfect, the fact that DXY is moving sideways instead of pushing higher is a positive sign for risk assets.
Gold, on the other hand, has surged past the 2.272 Fibonacci extension and is heading toward $3,113. The TBO Breakout Cluster on the daily time frame was a textbook example of a strong uptrend, with OBV and its moving average both pushing higher.
Altcoin Market Waking Up
Solana is flashing bullish reversal signals, including multiple TBT Bullish Divergence signals and a TBO Close Short. The price has successfully held above short-term resistance, and if momentum continues, SOL could return to $260 and beyond.
Cardano (ADA) is also moving higher following the news that Grayscale has filed to convert its ADA Trust into an ETF. ADA is up nearly 5% today, and an RSI Reset on the daily chart supports a continued move upward.
SUI is showing strength but is facing resistance. Previous signals in late January did not materialize into sustained rallies, so traders should watch closely how SUI handles overhead resistance.
Litecoin (LTC) remains above the daily TBO Cloud, showing strong technical positioning. The TBO Slow Line has been trending upward since December, reinforcing its bullish stance.
TAO has gained 25% since Friday, printing four consecutive green candles. Overhead resistance at $445 will be the next major test, but if it breaks through, TAO could see further gains.
Meme Coins and Smaller Alts Showing Strength
SONIC (FTM) is in the process of printing a bullish divergence signal on the daily chart, supported by an RSI Reset over the weekend.
MOG and FARTCOIN are also showing bullish divergence signals, with FARTCOIN attempting to break above short-term resistance. These meme coins remain highly volatile, but they have provided excellent trading opportunities on lower time frames.
HEX had a massive 121% pump yesterday, hitting long-term overhead resistance. This move followed a TBO Close Short on Sunday’s candle, another example of how the TBO continues to provide reliable reversal signals.
Final Thoughts: Preparing for the Next Move
As the crypto market starts to recover, make sure you apply what you’ve learned from this drawdown. The best way to prepare for the next market cycle is by building a strong foundation in crypto investing. Get started with The Complete Cryptocurrency Investor at Mastering Assets.
