Fragile Ethereum, will the prince of cryptocurrencies take altcoins in its fall?

Volatility continues to fall, so do altcoins? – The cryptocurrency market is going through a quiet period, and it usually doesn’t last very long. In the very short term, Ethereum ranges between $1,200 and $1,300 without taking a clear direction. Ethereum seems more feverish since The Merge event, it has lost almost 30% since September 15th. After taking profits at the resistance level at $1,900, are traders ready to buy the eternal second in market capitalization again?

This Ethereum price analysis is brought to you in collaboration with CryptoTrader™ and its algorithmic trading solution finally accessible to individuals.

Ethereum Stalls Above Support Weekly

For several weeks, the volatility drop in cryptocurrencies. Ethereum (ETH) stagnates at the support level $1,250 which corresponds to the neck line of the weekly “W”:

Ethereum price against the dollar (1W)

The price of the second capitalization always evolves within a ranges between $1,900 and $1,000. The trend is bearishbecause the course is always located below the bearish trendlineunder the institutional bias (EMA 9/ EMA 18) bearish and below resistance at $1,900. The course could once again be rejected on the level of institutional bias. If this is the case, the price could return to the low level of the range at $1,000.

the momentum is also bearish, the RSI continues to move below the bearish trendline. As long as this is the case, the course will continue to be brittle.

On a daily basis, Ethereum is above the bracket at $1,250buyers are unable to change short-term momentum:

Ethereum fails to change momentum on a daily basis.
Ethereum price against the dollar (1D)

On a daily basis, the price continues to show descending lows and highs and the institutional bias is resistance since a few weeks. Also, the course remains brittleas it is located below the bearish trendline dated August 2022. In the short term, ETH is bearishbuyers need to change momentum quickly to avoid hitting the next support at $1,000 (-20%).

At the momentum level, the RSI continues to evolve under the bearish trendline. This could do resistance in the coming days.

Ether must maintain support against Bitcoin

In recent weeks, Bitcoin has been gaining strength against altcoins. The ETH/BTC pair is in a weekly range and the price evolves at the level of a intermediate support :

The ETH/BTC pair is in a weekly range.
Price of Ethereum against Bitcoin (3D)

Despite the context of bear marketEthereum remains solid against bitcoin. There are not a lot of altcoins that manage to resist, but the Binance Coin is also one of those altcoins that resist or even outperform Bitcoin.

Therefore, two scenarios could arise:

  • bullish : buyers arrive at change the dynamic and the price goes up towards the weekly resistance. This scenario is materialized by the green arrow on the graph. It will be necessary to get rid of the resistance to revive the bullish momentum.
  • bearish : The Merge scored the top and the institutional bias resists. In this scenario, the price falls below the downtrend line and below the intermediate support to reach the bottom of the range. This is the scenario represented by the red arrow on the graph.

A drop in the pair would be catastrophic for altcoins since Ethereum is the altcoin leader. If Ethereum loses its strength against the king of cryptocurrencies, altcoins with lower capitalizations will follow.

Bitcoin will soon dominate at 42.5%?

The bitcoin dominance helps to know where the capital is going. In this bearmarket context, capital is increasingly flowing towards Bitcoin:

Bitcoin dominance continues to climb.
Bitcoin dominance chart (3D)

The price is heading slowly towards the first stop (0.382 Fibonacci retracement) to 42.5%. Institutional bias is now bullish on this graph and could serve as dynamic support in the days or weeks to come. If the first stop is breached, then price will head towards the shorts reload area between 45% and 46.5% of dominance.

Usually in a bear market like in 2018, Bitcoin dominance is climbing and not getting stuck in a range. Is the bear market only in its infancy or is the market evolving and altcoins gaining more and more space?

Capitalization of altcoins: the support is giving way?

Altcoins are struggling, and it seems to be continuing. The capitalization of altcoins is falling under the support at 520 billion dollars :

The capitalization of altcoins is falling.
Altcoin Cap Chart (3D)

Institutional bias has pushed the price back over the last few weeks and the price is slowly slipping below the support at 520 billion dollars. Looking at the momentum, it looks like the price is heading towards the next support at 465 billion dollars. It would seem that the price of the capitalization of altcoins is in a tidybut the buyers are going to have to defend the bottom of the range if this scenario plays out.

The RSI is showing feverishness, because it is pushed back with each contact at the level of the bearish trendline. The sellers have their hands on the momentum.

To analyse on chain : the exchanges record strong withdrawals in Ethereum

For the arrival of The Mergeplayers have deposited significant amounts of Ethereum on the exchanges to take some profits. Apparently, the behavior has changed since a few days:

Many withdrawals in Ethereum are noticed on the exchanges.
Deposits (green) and withdrawals (red) of Ethereum on the exchanges Source: Glassnode

We see it on the graph, strong withdrawals are made by the operators. Levels of withdrawals comparable to April 2022, November 2021 or even July 2021. The actors again seem confident after a few periods of panic (green peaks).

Volatility continues to drop and Ethereum is hovering around $1,250. The price is still moving above the support, but the momentum is still not changing at this time. In this bear market environment, Bitcoin continues to attract capital. Indeed, Bitcoin dominance is climbing and should quickly end up at 42.5%. The altcoins show signs of feverishness, the capitalization of the altcoins could drop a few percent to find the bottom of the range. On the side of on-chain analysis, it seems that the players are changing their behavior, because, for the past few days, many ETH have been leaving the exchanges. Is the storm finally over?

Is it possible to be a winner every time? Whether Bitcoin price is in great shape, or youthrough turbulence, CryptoTrader™ allows you to increase your chances of success through its 100% automated algorithmic trading tool.

John R. Zepeda

I have extensive experience working as a content writer in the areas of cryptocurrencies and finance, where I create interesting pieces that both inform and engage their audiences.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button