Crypto Markets Show Signs of Bottom Formation Despite Genesis Bankruptcy

• Bitcoin and altcoins have bounced off their immediate support levels and rallied higher despite the news of Genesis filing for Chapter 11 bankruptcy.
• A trading firm has warned that the current recovery in Bitcoin is only a bear market relief rally and could be followed by another bout of selling.
• An analysis of the top 10 cryptocurrencies suggests that Bitcoin and select altcoins are showing signs of a bottom formation.

The cryptocurrency markets have been volatile over the past few weeks with Bitcoin and altcoins bouncing off their immediate support levels and rallying higher in spite of the news of cryptocurrency lender Genesis filing for Chapter 11 bankruptcy. This indicates that the selling pressure could be reducing and that the markets are recovering.

However, a trading firm has warned that the current recovery in Bitcoin is only a bear market relief rally and could be followed by another bout of selling which could sink the price of Bitcoin and Ether below their 2022 low. QCP Capital used the Elliott Wave analysis to arrive at this conclusion.

Despite the warning, an analysis of the top 10 cryptocurrencies suggests that Bitcoin and select altcoins are showing signs of a bottom formation. The price action is climbing a wall of worry during the initial days of a new bull market, with analysts expecting the price to move lower but traders catching a change in trend if they keep an eye on the formation of higher highs and higher lows.

For example, Bitcoin’s price has been trading in a tight range between $20,000 and $23,000 for the past few days. This shows that buyers are accumulating at lower levels and not allowing the price to dip below $20,000. Similarly, Ether has been trading between $1,400 and $1,800, with higher lows indicating that the bulls are buying on dips.

Altcoins such as Binance Coin (BNB), Ripple (XRP), Cardano (ADA), Dogecoin (DOGE), Matic (MATIC), Polkadot (DOT), Litecoin (LTC) and Avalanche (AVAX) are also showing signs of a bottom formation. For instance, BNB has formed higher lows for the past few days and rallied above the resistance at $60 on Jan. 19. Similarly, XRP has held the support at $0.45 and formed higher highs.

Thus, it seems that Bitcoin and altcoins have shaken off the Genesis bankruptcy news and are likely to move higher if the buyers can hold the current support levels. Nevertheless, traders should keep an eye on the formation of higher highs and higher lows to confirm the change in trend and should not be overly bullish.