Bitcoin weekly: To bounce, or not to bounce?

Stock markets rallied as dip buyers stepped in early. But will a renewed Santa rally in stocks be enough for bitcoin and the crypto market to perk up? Last week’s bounce in crypto was not convincing, calling for caution to remain.

Also watch the accompanying chart analysis on YouTube.

Last week, after the lackluster response to Nvidias strong earnings, I wrote that we should be prepared for a larger correction over the next month or two. That is less certain now. Tech stocks bounced back strongly last week already, so it seems dip buyers stepped in earlier than I expected. As of writing this on Monday morning, last week’s rally is meeting resistance, with futures opening the week down. Nevertheless, the stock market is strong, and we could get a renewed rally into the end of the year.

Bitcoin followed the stock market up during the week, continuing the bounce from the low around $81k. If tech stocks keep rallying, the bounce could well continue higher. However, last week’s bounce in crypto was not at all convincing. Especially not across altcoins. Remember that unlike tech stocks, bitcoin properly broke down the week before last, so technically it looks much much weaker.

The unfortunate truth is that crypto is failing to get much attention right now, especially compared to AI. After the breakdown, we should now expect a lot of people are still looking to de-risk their crypto holdings. So until there are clear signs of a bottom being in, any pump should be viewed with extreme suspicion.

As I wrote last week, the next big support level below for bitcoin is at $72k-$76k. So if this current bounce fades, that’s where dip-buyers are likely to step in again. To the upside, the main resistance levels are $100k and $109k.

Bitcoin dominance ended the week flat. It could be setting up for a higher low, as altcoins continue breaking down. Altseason clearly remains on pause.