Today, we continue our cryptocurrency market analysis routine. The goal is simple: understand the current market structure and determine, if possible, different scenarios so as not to be surprised in the coming weeks. Does Ethereum have a strong influence on the market? For the moment, the altcoins are able to prolong a rebound that has already begun in recent days. Will this continue? Let’s go straight to our rankings.
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The market has overcome its first resistance, but it is not over.
Since last week, the market has managed to extricate itself on the upside from the resistance at 963 billion dollars, under which it has been evolving for several weeks. By taking the Fibonacci of the swing within the range, we were able to determine a first target which is Fibonacci 1.618. However, this has already been achieved. So what would be next?
From now on, to preserve the bullish trend as a whole, the market must not return below 963 billion. Otherwise, it would look like a false bullish breakout and re-entry of the range. Very soon, the market must return to $ 1071 billion to resume the uptrend. This would allow us to return below the support of summer 2021 which will likely act as resistance for the market.
A daily bullish trend on altcoins thanks to Ethereum?
When we remove the weight of Bitcoin and Ethereum from market capitalization, the structure is different. Currently, on a daily scale, altcoins are in a bearish swing pattern with a high of $ 690 billion and a low of $ 320 billion. However, within this bearish swing, we have a bullish internal structure. After breaking the high at $ 393 billion, altcoins made a new high at $ 410 billion and a new low at $ 379 billion.
Since the internal structure is bullish, the odds of a continuation to the upside are more important. Therefore, by breaking its current high, the altcoins could break free from a previous support that is in confluence. This would allow the market to continue its bullish pullback from the swing pattern which, I remind you, is bearish. However, with a $ 379 billion breakout, the internal structure will turn bearish.
Bitcoin still dominates in a bearish situation
Bitcoin has evolved in the same dynamic since last week. The bearish trend is confirmed in which the bottom and top are lower than the previous ones. This is the basis of a downward trend. Therefore, with Bitcoin’s loss of strength, altcoins are taking advantage of it to suck some of the capital out of the market. For now, we need to have a bearish bias to avoid going against the trend. So, if bitcoin’s dominance breaks from its current low, we can see a continuation of the bearish trend. In this case we can have as the first goal a return of the bitcoin dominance on 41.32%. It remains to be seen, in the event of a return to this level, whether the price will continue to fall or whether it will rebound.
To hope for a return to the upside of bitcoin dominance, the price will have to break free from its peak at 43.56% for the structure to change. This will allow, instead, to regain the pivot zone that has been acting as support and resistance for several months. However, most of the movement will still not be reproduced. To hope for a strong recovery in Bitcoin on a larger time scale, it will absolutely have to break free from the previous peak of 44.46%. This level is currently operating as a resistance.
Ethereum, the catalyst for the surge in altcoins?
Like altcoins, Ethereum’s swing pattern is bearish relative to Bitcoin. However, for several days now, the flagship activity of decentralized finance has resumed in color and retreated from certain technical levels. With the current bullish daily pattern, Ethereum has been in a pullback phase for some time, which allowed the altcoins to take advantage of it with a rebound. In parallel, this undermined the dominance of bitcoin.
Ethereum is currently at a technical level where the price reacts from August 2021. Will it be able to overcome it? If it succeeds, it will have registered a new top that will allow you to lengthen the daily trend. But how far can this rebound go? Theoretically, being ethereum in a bearish swing pattern versus bitcoin, it should stop at the swing high (red zone) between 0.075 and 0.076 bitcoin. However, it could very well turn to the downside with a bearish breakout of the internal structure. In order for this scenario to be realized, it will be necessary to break down the previous minimum.
As for shitcoins, I must admit, it is always difficult to measure the temperature of this market given the numerous exotic cryptocurrencies that can be found. For the moment, it should be understood that the weekly swing structure is bearish as well as the internal structure. As for the daily swing pattern, it is also bearish. Therefore, only the daily internal structure is bullish. Currently, the Shitcoin index price is at the upper limit of the swing structure. This is an important moment that allows us to consider two scenarios:
The first is a bullish breakout of the swing structure (the price closes above $ 2745). This would allow for a bullish daily swing pattern. Furthermore, if the index manages to break above $ 2912, it would also allow for a change in the internal weekly structure to be bullish. Therefore, new bullish targets can be considered. However, the most likely scenario is a reversal of the daily internal structure with a breakout of the low $ 2418. This would allow the index to complete its daily pullback and move towards the low of the daily swing pattern at $ 1676.
Here we are at the end of the crypto point for this weekend! Hoping it can shed some light on the current situation in the cryptocurrency market, beware of the weekly close tonight and the fast approaching monthly close! For now, Ethereum continues its bullish pullback, taking altcoins in its path. However, the asset is reaching important technical levels against bitcoin. Is the trend starting to run out? It also continues to monitor bitcoin dominance to be prepared, if necessary, for a reversal of the situation. In any case, if you want to read our latest technical analysis of Ethereum against the dollar, don’t hesitate!
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