The price of Bitcoin (BTC) broke through the critical $35,000 level on February 6 and continued to climb above $40,000, just days after MicroStrategy delivered Bitcoin to more than 1,000 companies.

The collapse of over $35,000 earlier this week was significant because it opened the door to a test of a new record. The recent hurdle of $40,000 prevented BTC from setting a new record, while Altcoins set many records last week.

Indeed, the cryptocurrency market is behaving in a parabolic fashion, with most investors seeing significant increases in the size of their portfolios. However, the DeFi Alts rally in particular is likely to overheat, as momentum could return to Bitcoin if BTC crosses $40,000.

Moreover, will the listing of Ether Futures (ETH) by the CME next week change the dynamics of the market or will Bitcoin continue to grow? Let’s look at the charts.

Bitcoin needs to break ultimate resistance before reaching new highs.

4-hour XBT/USD chart. Source: TradingView

The four-hour Bitcoin chart shows a nice breakout above $35,000, leading to a healthy continuation to $40,000. At this breakout, the $38,000 level gave a small bounce, but was not classified as a massive resistance zone.

The $38,000 mark was tested at the Elon Musk pump when the price of Bitcoin dropped significantly that same day. So if Bitcoin breaks through the $35,000 level again, it would not be surprising if it rises further to $40,000 rather than failing again at the $38,000 level.

This $40,000 zone is the last hurdle to reach new heights. However, this new strength of Bitcoin means that its dominance in the market is restored at the expense of most Altcoins.

Is Bitcoin’s dominance ready to collapse?

Bitcoin’s dominance on the weekly chart. Source: TradingView

Bitcoin’s dominance chart is a nice chart that shows how market cycles work. In recent years, Bitcoin’s dominance peaked in December, following an uptick in Altcoin led by Ethereum. This was accompanied by a sharp drop in BTC’s dominance in January.

This year this trend was repeated, with Altcoins becoming parabolic and reaching new historical highs, while Bitcoins consolidated within a range.

But every race ends and the altcoins are correct. Historically, there was a temporary dip in February, after which the dominance of the coins increased again slightly. This increase in dominance would be consistent with a possible correction in the ETH price.

CME ether futures are launched on Monday, February 8, after which a correction should not come as a surprise. This is exactly what happened to the CME Bitcoin futures contracts in December 2017. This marked the culmination of a bull cycle and the beginning of a multi-year bear market.

As a result, we may also see a correction in the case of ether, as attention is refocused on bitcoin, especially as the fuel cost of ether has reached absurd levels. This change could lead to a significant increase in Bitcoin’s dominance.

What are the next areas of concern for Bitcoin?

Table CTB/USD 1 day. Source: TradingView

The daily Bitcoin chart can be used to identify the next price targets for Bitcoin. If the price of Bitcoin can break through the $40,500 mark, the following points of interest can be determined using the Fibonacci extension tool.

When using this indicator, the most common Fibonacci level is 1,618. This level sets a potential price target for Bitcoin at $50,000 once it passes the recent high.

Table CTB/USD 1 day. Source: TradingView

Nevertheless, the price of bitcoin has already experienced significant growth in recent months. Therefore, a clear breakout above the previous historical high should be associated with a significant breakout of this support/resistance level. Otherwise, as history shows, margin building will likely continue.

In the chart above, the price of bitcoin has tried to surpass recent highs (after falling by half), but has failed to do so, leading to a new range. However, an apparent breakout above the historic high of $42,000 should propel the price of bitcoin to $50,000.

The views and opinions expressed in this document are solely those of the author and do not necessarily reflect the views of Cointelegraph. There are risks associated with all investments and business transactions. You should do your own research when making decisions.

Frequently asked questions

What was the price of Bitcoin in January 2017?

The price went up to $17,900. The price rose 5 percent in 24 hours and 1,824 percent since January 1, 2017, to a new record of $19,783.06. The price lost a third of its value in 24 hours and dropped below $14,000.

Will Bitcoin reach 50,000?

The price of bitcoins could reach $50,000 by 2021, according to Bloomberg analysts.

Has the value of Bitcoin dropped?

Bitcoin, the world’s largest crypto currency, fell more than 10% from the previous day to $34,200, according to Coin Metrics.

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