Bitcoin eyes $50K less than a month after BTC price broke its 2017 all-time high

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Bitcoin’s (BTC) price broke through the crucial level at $35,000 and continued its run above $40,000 on Feb. 6, just days after MicroStrategy’s pitched Bitcoin to over 1,4000 companies

This breakout above $35,000 earlier this week was significant as it opened the door to a new all-time high test. The final hurdle at $40,000 has prevented BTC from a new all-time high, while many all-time highs were established by altcoins during the past week.

Indeed, the crypto market is going parabolic as most investors have been seeing substantial increases in their portfolio sizes. However, the rally in DeFi alts, in particular, is at risk of becoming overheated as momentum may be swinging back to Bitcoin with BTC back above $40,000. 

Moreover, will the CME futures listing of Ether (ETH) change the market momentum next week, or will Bitcoin continue its climb? Let’s take a look at the charts.

Bitcoin should break final resistance before new all-time highs

XBT/USD 4-hour chart. Source: TradingView

The 4-hour chart of Bitcoin shows a beautiful breakout above $35,000, which resulted in a healthy continuation toward $40,000. During this run, the $38,000 level gave a small rejection but wasn’t classified as a massive resistance zone.

The $38,000 level received its test during the Elon Musk pump, as Bitcoin’s price retraced significantly on the same day. Therefore, if Bitcoin would break through $35,000 again, it wasn’t surprising to see a continuation to $40,000 rather than another rejection at $38,000.

This $40,000 area is the final hurdle to break before new all-time highs. However, this new strength in Bitcoin means its market dominance is rebounding at the expense of most altcoins.

Is Bitcoin dominance ready to break out?

Bitcoin dominance 1-week chart. Source: TradingView

The Bitcoin dominance chart is a beautiful chart demonstrating how market cycles work. In recent years, the Bitcoin dominance has topped out in December, following by an altcoin surge led by Ethereum. This has been accompanied by BTC dominance dropping substantially in January.

This trend was repeated again this year with altcoins going parabolic, hitting new all-time highs as Bitcoin consolidated within a range.

However, every run comes to an end, and altcoins will correct. Historically, a temporary bottom has been seen in February, after which the Bitcoin dominance rises for a little. This rise of dominance would be in line with a potential correction in ETH price.