Ethereum Stealing The Show – Crypto Piece
Bitcoin Playing Tricks
In our last crypto piece (found here), we outlined the scenario where Bitcoin goes into a topping process, but Ethereum along with other altcoins start to outperform aka mini-altseason. That’s exactly what seems to be happening in the past week. Ethereum relative to Bitcoin is attempting to break above the downtrend line once again. If this holds, the ratio can very likely head up to the resistance zone (minimum 11% outperformance for ETH relative to BTC). This could put Ethereum in the $3300 to $3550 range, most likely towards the lower end of the range.
Bitcoin is still following the topping pattern that was outlined in the last Crypto Piece. If this fractal continues then we can expect some more volatility on Bitcoin, but strong price action in altcoins in the near-term until the big leg down (in the fractal below) occurs.
Ethereum Magic
Ethereum is currently battling its $2977 resistance level after a strong run up into it. It’s important for this level to be captured if ETH is to reach its resistance zone between $3300 and $3550. However, a move back below $2500 would be an ominous sign for the altcoin market.
Ethereum has been closely following its Cycles Forecast. This points to one more leg up by the end of the month (probably to the $3300 to $3550 range) and then a meaningful correction in March, especially from 9th March onwards. Therefore, it’s important to have strict risk management at this point in the cycle, given that a sharp correction is around the corner.
Altcoin Mania
While many were waiting for the Bitcoin dominance chart (top panel) to climb to either the 57.33% resistance level or 60.75% to 62.85% resistance zone, we outlined a different approach. Adding Tether (USDT) dominance and Circle (USDC) dominance to Bitcoin dominance (bottom panel) showed that the important resistance levels were already met. The thought process behind it was the growing important of stablecoins since the last cycle, which meant that it’s important to not only look at Bitcoin’s dominance but also the money parked on the sidelines in stablecoins. The bottom panel has started to show signs of a pullback, indicating that money is now rotating into Ethereum and other altcoins.
Moreover, the chart of Bitcoin dominance + Ethereum dominance + Tether (USDT) dominance + Circle (USDC) dominance (top panel) looks eerily like Bitcoin dominance chart from 2018 to 2021 (bottom panel). This helps provide us a blueprint of what we can expect. While there might be more sideways chop for some time, a mini altseason is brewing where the top panel is likely to make a move down (cryptos excluding BTC, ETH, USDT and USDC gain market share), similar to the move the bottom panel did in the last cycle. This should just be a mini-altseason, with the full blown altseason still to come down the road as seen through the big move down in the bottom panel, which is when altcoins see parabolic moves up. However, the beginning of this mini-altseason will only be known once the top panel begins its leg down (could be days, weeks or even a few months of sideways first, so patience is key here).
Our paid subscribers will be the first to know as soon as we see the above chart move down, indicating an altseason in the works. We’ll also notify you of when it’s a good time to switch capital back to Bitcoin, Ethereum and stablecoins based on when the top panel in the chart above is expected to move higher (indicating money being rotated back out of altcoins). The next paid section contains the Cycles Forecast and important levels for Solana ($SOL), Binance Coin ($BNB), and Dogecoin ($DOGE).