The cryptocurrency market seems to be gaining strength, though veteran trader Gareth Soloway is cautious about declaring a full bull market just yet. He believes there could be room for a short-term rally, noting that the charts are indicating bullish patterns.
He mentioned, “The chart is unbiased. If it shows a bullish pattern, I go long; if bearish, I go short.” Currently, he sees a bullish structure forming.
Bitcoin may reach $80,000-$85,000
Recently, Bitcoin dropped close to $60,000 but has since rebounded sharply. Soloway identifies this recovery as a classic bullish consolidation pattern.
Following its decline, Bitcoin displayed a strong reversal candlestick and began trading sideways within a tight range. This kind of pattern often suggests that buyers are gradually accumulating positions before pushing prices higher.
According to him, Bitcoin is likely to touch $80,000 before possibly declining to $50,000 in the near future.
He highlights a few key factors:
- A steady trend following the decline
- Negative market sentiment which could trigger a short squeeze
- Substantial accumulation between $60,000 and $70,000
Soloway considers the target zone of $80,000 to $85,000 realistic, influenced by market momentum and upcoming regulatory developments in the crypto space.
That said, he stresses this doesn’t necessarily signal the start of a new sustained bull market; it might just be a strong relief rally within a broader cycle.
Ethereum could increase by over 30%
Ethereum is also displaying signs of strength. It recently climbed back above $2,000, forming what Soloway describes as a “bull flag” breakout pattern.
If this breakout persists, he anticipates Ethereum could surge towards $2,600 to $2,800.
This suggests potential gains of 27% to 35% in the short term.
However, he cautions that there will be significant resistance in that range. Traders may encounter intense selling pressure if ETH hits $2,600-$2,800.
On the downside, key long-term support hovers around $1,500. If the broader market experiences a downturn, this level could become critical once again.
XRP needs to surpass $2 for significant movement
XRP is currently trading near $1.40 and finds itself in a more vulnerable position.
Soloway notes that XRP recently fell below a crucial support trend line, rendering the chart somewhat weaker. Still, a rebound remains a possibility.
Important resistance levels exist between:
- $1.60 and $1.90
- Resistance amplifies around $2.00
He believes that if XRP can get above $2 and maintain that level, a more substantial move could happen. A move from $1.60 to $1.90 could indicate an upside potential of 11% to 33%, but a real breakout requires surpassing $2.
What’s driving the rally?
The market seems to be anticipating positive regulatory news, especially with discussions about crypto scheduled in Washington.
When sentiment turns overwhelmingly negative, it often creates conditions for a rapid rally. Short squeezes can happen quickly in the crypto market, driving prices up in a short timeframe.
FAQ
This rally has been driven by favorable regulatory talks, prevailing negative sentiment setting the stage for potential short squeezes, and significant accumulation between $60,000 and $70,000.
Experts warn that while a rally to $85,000 is feasible, it could merely represent a temporary surge within a longer cycle, rather than the start of a new bull market.
