While these last few weeks have not breathed joy into the cryptocurrency market, these last few days have turned rather green for the majority of assets. Is the market ready to rebound or is it a simple technical rebound before starting to fall again on all financial markets? The American indices recovered well in parallel with the dollar which is in a downward daily trend. This dynamic is part of a context where the FED is beginning to consider a slowdown in the rise in interest rates. The time would therefore be opportune for cryptocurrencies which, we remind you, are considered risk-on assets. In this new crypto weekend update, let’s head over to TradingView to identify the current market situation and what to look out for in the days and weeks ahead.
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First, let’s kick off this crypto weekend update with an analysis of total market capitalization. For several weeks, the cryptocurrency market has been evolving in a tidy between 880 billion dollars and 944 billion dollars. Completely amorphous, the majority of assets no longer evolved at all. However, for the past few days, the market has been picking up again since it is freed from the trio of EMA 13/15/32 on which the bearish rejections were multiple. By managing to close above the upper limit of the range that has lasted since mid-September, the market moved very quickly toward the MA 100. This dynamic technical level could act as resistance to the market.
Thus, it will be necessary to monitor the daily close to see if the market will be able to overcome it. For the moment, the daily trend is now bullish. If the capitalization manages to stay above the MA100, the context would be favorable for the rise of certain cryptocurrencies. In this context, the total market capitalization could take the direction of the upper resistance at 1020/1030 billion dollars and if it preserves this momentum, we could even consider a return on the EMA200 which is located just below resistance at around 1140 billion dollars.
However, if the buyers do not have enough vigor to retake the MA100 and the market returns below the upper limit of the range at $944 billion, this would demonstrate the presence of sellers to keep cryptocurrencies in a situation of lateralization. In this context, it will be necessary to monitor the reaction of the price of the 919 billion dollars which is in confluence with our trio of EMAs. A rebound could be possible on this level to make it support and to attack again the 944 billion dollars for the umpteenth time. This would preserve the bullish momentum that is building in the short term.
Are altcoins in the same situation?
For the altcoins, the situation is different. Total capitalization included bitcoin fluctuations and Ethereum. Here we are only concerned with the evolution of altcoins. We can see that the MA100 has not yet been broken upwards, the price has just reacted to it, will it break free? If it does, the first area where altcoins might react on the downside is the 50% Fibonacci of the bearish retracement. This is a technical level that seems relevant, the price has already reacted to it as support or resistance. In this context, if the altcoins manage to take over the $392 billion doors would be open for significant increases on certain assets.
However, nothing is decided yet, no need to sell the skin of the bear before having killed it. Having broken up the resistance at $378 billion, we must now hope for a trough higher than the previous one. This will confirm the presence of an uptrend on a daily scale for altcoins. You can see that after breaking out of the trio of EMA 13/25/32, the market cap rebounded before heading higher. This dynamic support is in confluence with the 3$61 billion and must not be lost if we wish to hope for the return of altcoins to higher price levels.
A loss of these technical levels would invalidate the first signs of an uptrend for the next few weeks. Thus, a back to $346 billion would not be unthinkable. At the moment, the total market capitalization and the capitalization of the altcoins give us signs of a trend reversal. Whether Bitcoin and Ethereum decide not to mess it up and the dollar loses strength, the context could be favorable for buyers. In this framework, we can establish a target of 440 billion dollars, a resistance that is in confluence with the EMA200 although it is not materialized on the graph above.
Where is Bitcoin’s dominance compared to other cryptocurrencies?
While the asset was enjoying very good momentum by sucking up a good part of the capital from the market, the last few days have been different since Bitcoin dominance dropped a few percent in favor of Ethereum as well as some altcoins. Breaking down its dynamic supports which are the trio of EMA as well as the MA100, the trend is now bearish. A return on the 40.44% is not to be avoided, on the contrary. For Bitcoin to regain strength in the market and suck in the capital again, it’s simple: register a peak higher than the previous one by breaking the EMA200 upwards, this will probably allow dominance to return to 42.56%, an important technical threshold.
In the current context of a rebound in the indices and a possible weakness of the dollar for the coming weeks, Ethereum and the altcoins could do well by continuing to register good increases. However, this will not prevent Bitcoin from rising in value and seeking higher price levels, it just means that capital will be more likely to flow into other assets. To better understand the balance of power within the market, let us now move on to an analysis of the pair ETH/BTCthis will allow us to consider the dynamics that the market will have during the next few weeks.
Ethereum rebounds sharply against Bitcoin
Compared to last week’s analysis where I rather identified a bearish bias, the market proved wrong since it decided to rebound by going up. Ethereum, against Bitcoin, has overcome a set of technical levels which are the horizontal resistance represented in red, the EMA 200, the trio of EMA 13/15/32 as well as the MA100. Fast enough, Ethereum Headed to Resistance at 0.078 BTC where it is currently located. The challenge is quite simple: to hope for a continued rise in the asset against bitcoin, it will have to get out of this gray area, which would allow it to return to 0.08 BTC.
In this context, bitcoin dominance would continue to fall and will, at the same time, leave the doors open to nice increases in altcoins. However, nothing is decided yet, it is possible to witness the rejection of Ethereum on this level. Over the next few days, we will have to monitor Ethereum’s ability to stay above its MA100 which is close to the EMA trio. If it does not succeed, it will probably return to the 200 EMA, the whole stake will lie in the rebound or the bearish breakout of Ethereum on the red zone at 0.07 BTC.
What is the situation with decentralized finance cryptocurrencies?
Since September’s analysis of FTX’s DEFI-PERP index, things have changed little except for the volumes and location of the POC which now sits at $2540. Several times, the index bounced off the Value Area Low with a nice wick of liquidation during October. Mostly, the price manages to stay above its Point Of Control which is currently acting as support. In the past few days, the EMA trio has been regained and the High Volume Node has been broken on the upside. However, the index is stuck below resistance at $2753. Until it manages to close above this level, it will be useless to hope for higher price targets.
If the index manages to progress upwards and regain the 2753 dollars, two goals could be considered:
- The first technical level where the price could react is on the 50% of Fibonacci at 2834 dollars
- The MA100 at 2930 dollars on which the price reacted a few days ago
If buyers fail to demonstrate their strength over the next few days, this would presage difficulty for decentralized finance assets to register a bullish movement. In this context, it will be necessary to monitor the POC since a loss of this level could lead the index to return to the Value Area Low.
Here we are at the end of this crypto point of the weekend! After several weeks when the market was amorphous, volatility has been back for several days, to the delight of buyers who had the opportunity to position themselves on the markets during October. Over the next few days, we invite you to carefully monitor the balance of power between Ethereum and Bitcoin as well as the dominance of the latter. This will help understand where capital tends to go and if there is any upside potential for altcoins. However, for the latter, do not forget that they evolve under the MA100. If they manage to overcome it, the situation could be interesting during November. So, remember that nothing is decided yet. Do not forget to monitor the evolution of the American indices and the strength of the US dollar, they will allow you to anticipate a potential return of sellers or the continuation of the rise in the financial markets.