What if the fall was over? – After several months of decline, the cryptocurrency market is encouraged with a return to the upside for most assets. The cryptocurrency market remains highly correlated to the US market which is currently rebounding. While the macroeconomy prompts us to remain vigilant, the market seems to be taking advantage of the ambient pessimism to regain some momentum. If the bear market is just beginning, the joy will be short-lived and those bulls will not be consistent. On the other hand, if bitcoin has ended its fall, excellent opportunities could arise. To try to find out if this can last, let’s look at the clues left by the charts concerning altcoins.
This analysis of the Ethereum price is brought to you in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.
Ethereum strong against Bitcoin
The founder of Ethereum said that The Merge was not priced yet by the market in an interview with Bankless. Protected son shows very encouraging signs :
A few months away from The Merge, Ethereum re-enters the range against Bitcoin. When a range is reintegrated, there is a strong probability of returning to the level of the opposite limit. ETH/BTC is close to the resistance and this level could reject the course. Also, the course is working on the weekly bearish trendline. The course is again bullish thanks to the change in momentum made at the support level, but the price remains fragile under the downtrend. Price needs to hold and stay above the trendline for Sunday’s weekly close.
Also, the RSI gave a bullish signal by breaking the bearish trendline initiated in mid-May 2021. This type of breakout generally gives strength to buyers.
The price of ETH/BTC is very positive in view of The Merge. If resistance breaks, Ethereum could continue to overachieving Bitcoin and get the altcoins with him. This is a signal eagerly awaited by the actors.
Altcoin Capitalization Approaches Weekly Resistance
As said in This articlethe capitalization of altcoins had the possibility of bounce at support level. It’s chosen done, the course recorded 45% rise from the wick left at the level of the support:
The course is approaching a weekly resistance important and this could slow the rise. On a weekly basis, the price has changed momentum, but the price remains brittle. In effect, the range has been broken down and the price is below the downtrendline.
As with the ETH/BTC chart, a re-entry into the range would be great for altcoins. For the moment, the resistance approach and we must remain cautious. Moreover, the momentum is always brittle because the RSI is still below its weekly downward trendline.
The tokens of the exchange platforms ready to fly away?
The FTX platform was created index which groups together several tokens of different exchange platform. Here is the graph:
The graph is very interesting, because it is the only one that has kept the support integrated following the fall in May 2021. This shows that the tokens of the exchanges are very solid. The price could quickly find itself at the level of the resistance.
Also, the momentum RSI is in the process of break its trend line. This will be confirmed at the end of the candle, in early August. If so, it is a trend line initiated in May 2021 that would break and thus could release some force the buyer.
If the rise continues, it could be interesting to look at tokens like the BNB (Binance Coin)the FTT (FTX token) etc
Bitcoin dominance gives a bearish signal
The bitcoin dominance lets you know if the capital goes to Bitcoin or to altcoins. For lovers of very risky assets, it is interesting that the graph is bearishas this indicates that players are geared towards altcoins.
The dominance of Bitcoin is in a interval for more than a year. The break of the support or the resistance will allow to have important information :
- Resistance breakage : if the resistance yields, the capitals move towards the Bitcoin. This is a bad sign for altcoins and could indicate a continuation of the bear market.
- Support breakage : if the support yields, it is a bullish signal for altcoins. This would mean that capital is pouring into altcoins. We could even talk about altseason in the event of a break in support. This support has held three times, if the price returns to this level, there is little chance that it will hold again.
Currently, the price has broken the bullish trendline (brown). From now on, the probabilities are oriented towards a back to support level as shown on the graph. Be careful though, if Bitcoin came to fall sharply and lose the lowest at $17,650, dominance could quickly return to the upside. In short, you have to wait for a breakout of the support or resistance to put the odds on your side.
Altcoins could benefit from the shorts
For several months, the actors aggressively shorten altcoins :
the financing rate is an indicator that allows us to assess the behavior of players in derivatives markets. In May 2021, after Bitcoin and altcoins fell sharply, the funding rate was largely negative. UN negative financing rate indicates significant selling pressure in the derivatives markets and this often leads to a short press.
The current situation resembles that known in the summer of 2021, we can even see that the funding rate is more negative than last year. If Bitcoin consolidates or rises calmly, altcoins could speak out.
The cryptocurrency market is highly correlated to the US market. Despite a negative macroeconomic context, the market is recovering and returning to the upside. A few months from The Merge, Ethereum looks set to rebound in value and bring altcoins with it. If so, the jets from the exchanges might be of interest as they have demonstrated resilience. Since the breakout of the $30,000 zone, Bitcoin remains fragile and could, at any time, bring down altcoins. Even if the situation resembles that experienced in May 2021 on the derivatives markets, Bitcoin has broken an important support and sellers can regain control at any time.
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