Bitcoin Prints Bullish Reversal Signal, But Short-Term Risks Loom
Bitcoin kicked off the week with strength, testing overhead resistance twice and printing a long-awaited TBO Close Short on the daily timeframe. Historically, this signal has marked the end of prolonged consolidation phases, and the current price action suggests the same shift could be underway. Daily volume is outpacing its 30-day average, On-Balance Volume is trending higher, and RSI continues to pressure resistance—all classic ingredients for a bullish breakout. BTC also sits inside the daily TBO Cloud, signaling long-term strength.
Despite this optimistic backdrop, there are clear short-term concerns. A TBT Bearish Divergence appeared on the 4-hour chart, the same signal that preceded the sharp drop from $88,000 to $74,000 in April. Additionally, a TBT Stop Loss Hunting alert fired yesterday, which frequently, though not always, foreshadows sudden bearish price action. These two warnings, paired with BTC’s inability to pierce daily resistance and RSI’s failure to break above its long-term trendline, suggest a short-term correction may be imminent. A -4% to -5% dip to the $81,000–$82,000 range appears likely, especially considering confluence at key Fibonacci retracement levels.
Dominance Metrics Suggest Altcoins Will Struggle in a Pullback
If BTC does retrace, stablecoin dominance is expected to rise back toward resistance at 8.22%, while Bitcoin dominance is likely to continue climbing. Despite lower highs forming on daily RSI for BTC.D, price strength suggests altcoins will lag. Top 10 Dominance will likely fall alongside BTC, while OTHERS.D remains in recovery mode following its recent drop. Given the known multiple factor effect—where altcoins react with greater volatility than BTC—a pullback in Bitcoin will disproportionately impact the broader altcoin market.
The total crypto market cap is still consolidating inside the daily TBO Cloud after breaking its first resistance fan line. While this is a positive signal, a BTC correction would drag TOTAL back down. The OTHERS chart continues to look weak, holding below the daily TBO Cloud and confirming its bearish bias. This reinforces the likelihood that altcoins will react more violently than Bitcoin during any near-term drawdown.
Volatility Eases but Could Return Quickly if BTC Pulls Back
BVOL7D has exited the Rejection Zone as expected, a reflection of reduced short-term volatility in response to falling RSI and declining price momentum. However, if BTC falls by 4% to 5%, volatility could spike again. This setup is reminiscent of February’s pattern, when brief corrections led to quick surges in BVOL7D before resuming broader trends.
Ethereum and Major Altcoins Remain Vulnerable to BTC Movement
Ethereum remains structurally bearish with no signs of reversal. Volume is weak, OBV continues its downward slope, and price remains below both the daily and weekly TBO Clouds. XRP is back inside the TBO Cloud, but a BTC pullback would likely drag it down as well. SOL managed to close above overhead resistance and into the TBO Cloud, printing a daily TBO Close Short and reclaiming the 0.786 Fibonacci retracement level. However, a TBT Bearish Divergence on the 4-hour points to a potential pullback toward $121 to close its CME gap.
LTC is now on its fourth day above its first resistance fan line, but the muted market reaction suggests limited conviction. LTC needs a stronger move inside the TBO Cloud to turn sentiment. OM saw massive volume on Sunday and Monday, totaling nearly $900 million on Binance, but price action has cooled considerably. While the weekly chart offers a possible path to 0.8876, traders should be cautious with weekly RSI still heavily oversold and long-term support much lower.
Final Thoughts
Bitcoin’s daily chart looks strong and continues to support a longer-term move toward $94,000. However, multiple short-term bearish signals are flashing warnings. A pullback to $81,000–$82,000 appears likely, and altcoins are expected to react more violently in that scenario. The broader crypto market continues to show signs of recovery, but volatility is far from over.
Take partial profits where possible and reduce risk when bearish signals appear. Even in a slow grind higher, corrections are inevitable. Securing gains along the way ensures you remain in control, regardless of market turbulence.
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