Weekend Crypto Point: A Market Still Moving Under Resistance?

Today, let’s continue our cryptocurrency market analysis routine. The goal is simple: understand the current structure of the market and determine, if possible, several scenarios in order not to be surprised during the coming weeks. Does Ethereum have a strong influence on the market? At the moment, altcoins are managing to extend a rebound that has already started in recent days. Will this continue? Let’s go straight to our charts.

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The market has broken out of its first resistance, but it is not over.

The price of the total market value of cryptocurrencies (1D)

Since last week, the market has managed to break free upwards from the $963 billion resistance, under which it has developed for several weeks. By taking the Fibonacci of the oscillation we had within the range, we were able to determine a first target which is 1.618 for the Fibonacci. However, this has already been achieved. So what would be next?

From now on, to maintain the bullish trend as a whole, the market must not return below 963 billion. Otherwise, it would look like a false bullish breakout and a re-entry of the area. Soon the market must rally back to $1071 billion to resume the uptrend. This would allow us to return below the support of summer 2021, which is likely to act as a resistance for the market.

A daily bullish trend on altcoins thanks to Ethereum?

Market cap price for cryptocurrencies excluding Bitcoin and Ethereum on a daily scale
Price to Market Cap for Cryptocurrency Excluding Bitcoin and Ethereum (1D)

When we remove the weight of Bitcoin and Ethereum from the market value, 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. But inside this bearish swing we have an internal structure that is bullish. After breaking the high of $393 billion, altcoins registered a new high of $410 billion as well as a new low of $379 billion.

Since the internal structure is bullish, the probability of an upward continuation is more important. Thus, by breaking out of its current high, altcoins could break free from a previous support which is converging. This would allow the market to continue its bullish retreat from the swing pattern, which I remind you is bearish. However, with a breakout of $379 billion, the internal structure will turn bearish.

Bitcoin still dominates in a bearish situation

Bitcoin dominance course on daily scale
Bitcoin Domination Course (1D)

Since last week, Bitcoin has developed in the same dynamic. It confirmed the downward trend, where it is registered with a bottom and top, which are lower than the previous ones. This is the basis of a downward trend. With Bitcoin losing strength, altcoins are taking advantage of this to siphon 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 dominance breaks from its current low, we may see a continuation of the downtrend. In this case, we could have as a first goal to regain the bitcoin dominance of 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 rise.

To hope for a return to the rise in bitcoin dominance, the price needs to break free from its high of 43.56% for the structure to change. This, on the other hand, will make it possible to regain the pivot zone, which has acted as support and resistance for several months. However, most of the movement will not be played yet. To hope for a strong recovery in Bitcoin on a larger time scale, the bidder will need to break free from a previous peak of 44.46%. This level is currently acting as resistance.

Ethereum, the catalyst for the rise of altcoins?

Ethereum price against bitcoin on daily basis
The price of Ethereum against Bitcoin (1D)

Like altcoins, Ethereum’s swing pattern is bearish against Bitcoin. But for several days, the flagship asset of decentralized finance has recovered in colors and pulled out of certain technical levels. With the daily pattern currently bullish, Ethereum has been in retreat for some time, allowing altcoins to take advantage of it with a bounce. This has concurrently undermined bitcoin dominance.

Ethereum is currently at a technical level where the price has reacted since August 2021. Will it be able to overcome it? If it succeeds, it will have registered a new top, which allows the daily trend to be extended. But this recovery, how far can it go? Theoretically, since ethereum is in a bearish swing pattern against bitcoin, it should stop at the swing high (red zone) between 0.075 and 0.076 bitcoin. However, it may well turn lower with a bearish breakout of the internal structure. For this scenario to happen, the previous low must be broken.

Shitcoin Index Perpetual Future Daily Price
The Shitcoin Index Perpetual Future Price (1D)

As for shitcoins, I have to admit that it is always difficult to take the temperature of this market considering the many exotic cryptocurrencies that can be found. For now, 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. Thus, only the daily internal structure is bullish. Currently, the price of the Shitcoin index is at the upper limit of the swing structure. This is an important moment that lets us consider two scenarios:

The first is a bullish breakout of the swing structure (price closes above $2745). This would allow for a bullish daily swing pattern. Moreover, if the index manages to overcome $2912, it would also allow a change in the internal weekly structure to be bullish. Thus, 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 at $2418. This would allow the index to complete its daily pullback and head towards the low of the daily swing pattern at $1676.

Here we are at the end of the crypto spot for this weekend! In the hopes that this may shed some light on the current state of the cryptocurrency market, keep an eye out for the weekly close tonight as well as the monthly close which is fast approaching! For now, Ethereum continues its bullish pullback, taking altcoins in its wake. However, the asset is coming off major technical levels against bitcoin. Is the trend starting to run out of steam? Also, continue to monitor bitcoin dominance to be prepared for a reversal of the situation if necessary. In any case, if you want to read our latest technical analysis of Ethereum against the dollar, don’t hesitate!

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