Bitcoin’s price action is tightening. Ethereum, on the other hand, has been doing quite well for quite some time. Will it push altcoins towards a new rally? Let’s find out!
Is it time for elevated volatility?
It may seem that Bitcoin is behaving in a sluggish manner. Nothing could be further from the truth! Similar situations have so far heralded upcoming dynamic movements. Looking through the prism of the formations forming on the chart, the same impression can also be given this time. In recent analyses, we mentioned the ascending channels that followed each other. Today we point out that the price action, contained in the second channel, has weakened significantly, resulting in the formation of an ascending pennant. Currently, bitcoin is at its lower limit, heralding a potential breakout towards the bottom.
Two indicators are worth noting on this occasion. The first is the MACD, which at the time of writing this analysis is making a bearish cross. The second is the RSI. Here we were hoping for a higher breakout, which would have resulted in a strengthening of the already present bearish divergence. However, this has not happened. Meanwhile, on the same indicator, we note that the support line is currently being broken out. To confirm this, we should wait until the end of the currently ongoing trading session. If, on the other hand, the situation manages to persist, we can expect a continuation of declines. The target may turn out to be this year’s minima. A possible denial of this scenario is a chance for Bitcoin to break out towards the price downtrend line, which at the moment, is located around $27,500 and is falling by about $125 every day.
95% in just 32 days! This is the result that Ethereum has achieved, during its current rally. ETH established its local peak at close to $2,032. Importantly, it looks like Ether still leaves itself a delicate room for growth. This is told to us, for example, by the downtrend line, which at the time of writing this analysis, is located at the level of $2,237 and is falling by less than $20 with each passing day.
On the chart at this time we observe a clear bearish divergence, which also leaves itself room for growth. As in the case of BTC, here we have a clear RSI support. The weakening MACD, on the other hand, may suggest a temporary deceleration of the rally. Possible declines could therefore lead to an attempt to test the $1,700 level as support.
Altcoin’s strength revealed in dominance
Bitcoin’s dominance chart once again deserved special attention. Once again, in the last three years, BTC is meeting on it, with a key trendline providing support. Such a situation has the right to herald an upcoming move on the part of the king of cryptocurrencies and its strengthening against altcoins. On the other hand, however, the 40% level is extremely close and is once again being tested. This could mean that its eventual breakout, will trigger a temporary season for altcoins.
SPX will decide what to do next
But let’s not hide the fact that the condition of the cryptocurrency market depends on the traditional trading floor. And on it, the SPX has just reached resistance, resulting from the presence of a downtrend line. In addition, we observe a bearish RSI divergence, exiting into an overbought area. It is on the movements on this chart that the further price action of both Bitcoin and other coins depends.