In this new crypto point of the weekend, like every Sunday, we will focus on the overall situation of the Bitcoin and cryptocurrencies market determining the bias to have, the technical thresholds to watch and what has happened on the class in the last 7 days. This will allow us to take a step back from our previous analysis by asking ourselves whether the scenarios that were set have been confirmed or not.
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Cryptocurrencies are close to the 1 trillion capitalization threshold
Last week we discussed the resurgence of technical resistance at $780 billion (not shown here), which was the first phase of an upward trend reversal. Having managed to regain the $800 billion and then the resistance at $845 billion at the confluence with the MA100, the buyers managed to operate a short squeeze which translated into a very powerful bullish movement.
The price of the cryptocurrency capitalization has replenished the previous range also regaining the pivot level that was built from September to October 2022, which paved the way for a return to the EMA200 that the price has not found since last April! Although this rise is very attractive, it should not lead us to let our guard down on the financial markets.
We are on a technical confluence which is the daily EMA200 where it is just above a technical resistance at $980 billion. However, it’s important not to rush and FOMO without thinking about current levels, although they can be, depending on your investment thesis, quite attractive in the longer term. Consolidation with a pullback is possible, but to what extent? In order not to break the momentum, the capitalization of cryptocurrencies could go back up to 850 billion dollars to confirm the bullish exit from the range in which prices have been evolving since November.
Altcoins Lagging?
As for the altcoin capitalization (excluding the capitalization of Bitcoin and Ethereum), we can see that the price is lagging as they have not reached the daily 200 EMA for now. Currently the altcoins have broken out of a technical confluence which is the MA 100 and the resistance level at $332 billion where the price continued to be rejected lower in November and December.
The price is currently below the $350 billion support on which the price held from June to last October. For now, given that the daily momentum is bullish, there is no doubt that a return of this support will pave the way for a more sustained rise in altcoins which could take advantage of it to return to the 200 EMA currently in confluence with a pivot zone at $375 billion .
Here are the two technical levels that altcoins will have to recover if they want to return to the resistance represented in red at $400 billion. For the moment, nothing is decided yet despite the strong momentum we have experienced in recent days. To avoid a bearish reintegration of altcoins with sellers rallying, the ideal scenario would be to keep the price above $332 billion in order not to fall below the 100 MA.
A Bitcoin that once again proves its strength against other cryptocurrencies
As far as the dominance of Bitcoin is concerned, what has happened these days is very interesting since the bearish scenario took place before starting the realization of an upward trend in the dominance price. As agreed, the price reversed at MA100 which triggered a very strong start for Ethereum and altcoins. A large number of cryptocurrencies have seen double-digit increases. The liquidity that went to Bitcoin gradually moved to the rest of the market.
However, a very powerful rebound has taken place in Bitcoin which has decided to bounce back as the market leader. While altcoin prices have surged, that hasn’t stopped the king of cryptocurrencies from sucking up a big chunk of capital, giving it a chance to bounce back to $21,000 in seconds.
Coming to a key level, it is possible to see a decline in the dominance of Bitcoin for some time. This would be an opportunity for the cryptocurrency market to take a breather to get a necessary technical pullback if we are to continue the market to rise.
Ethereum is still moving into the same technical zone
Regarding the situation of Ethereum vs. Bitcoin, we can see that the price is still moving in the upper area of the range that has been building since April 2021. For the moment the price fails to break above the upper limit of the range at 0.0789 BTC, especially as just below is a second resistance at 0.0769BTC. If Ethereum manages to overcome this double resistance, the price will probably head towards 0.085BTC.
It’s kind of a current issue for buyers who are hoping to see a steep increase in price. An upward breakout of the range would be an opportunity for Ethereum to lead the market and outperform Bitcoin. This would be an ideal scenario for altcoins to react more favorably to an increase in Ethereum than increases by the king of cryptocurrencies. However, if the price fails to do so and loses its 3D trend with its trio of EMAs, the way would be open for a return to the MA100 and an outperformance of the asset against Bitcoin.
Decentralized finance in great shape
In regards to the capitalization of DeFi cryptocurrencies, the targets mentioned last week have largely been achieved as the price returned to the range in which it had evolved between September and November 2022. Reacting on a pivot zone at $44 billion, the price now has an important objective: to stay in the range by remaining above the lower limit of 40 billion dollars.
If this target is achieved, it would be a signal of strength in DeFi assets, which should alert investors to the need to monitor cryptocurrencies operating in this sector. The second problem is a reprise of the pivot zone we talked about. If the price were to break this upside zone, it could move towards the 200 EMA where the upper limit of the range is located at $48 billion.
Here we are at the end of this technical analysis. This week has been very exciting and the week that follows is likely to be one of continuity as the market will have to choose between, on the one hand, the continuity of a bullish momentum favored by a rather weak dollar or, on the other, a trend reversal which could be set by marking a local maximum on current levels. What is certain is that the rise we have just experienced is powerful and for it to continue we will need to mark a pullback.
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