Today, in this unique format, discover a technical analysis that will allow you to make an overall update on the situation of the cryptocurrency market. For several months, the market has been in a downward trend, impacted by the macroeconomic situation. What could he hold for us in the future? In this crypto point, let’s take a look at different elements such as the total market capitalization of cryptocurrencies, the total capitalization of altcoins, bitcoin dominance, the balance of power between Ethereum and Bitcoin as well as the Altperp index.
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The cryptocurrency market is less than 1000 billion, but for how long?
First, we can start our analysis with the total market capitalization on a weekly basis. After losing its summer 2021 support at $1.2 trillion/$1.12 trillion, a powerful drop took place to make a comeback on the 2017 all-time high at $761 billion. Having bounced off this level, the weekly trend is still bearish. The current challenge is as follows: do not close below 761 billion to avoid a downward acceleration.
In the event that the market is led to extend the trend, you must have in mind levels below the all time high which are as follows:
- The pivot zone at $285/320 billion
These technical areas were important in the past, it is very likely that the market reacts on this level. This will of course depend on the fluctuations of Bitcoin and Ethereum, the direction that these two assets will take.
Finally, to finish on the total market capitalization, let’s briefly discuss the daily scale. The observation is simple, it is useless to want to understand the future movement since we are in a range situation between 963 billion and 833 billion dollars. Until we see resolution, we will not be able to determine more specific price targets. If the market is led to continue its rebound by breaking the resistance upwards, we can envisage a potential return to the support of summer 2021. This would allow a pullback to be achieved on a weekly scale.
What about the market without bitcoin and ethereum?
Now, it seems interesting to talk about the market situation without taking into account Bitcoin and Ethereum. You can see the price comeback, for several weeks, on the all time high of 2017 at $358 billion. Key level on which altcoins have sidetracked for several weeks, will it give way to the benefit of sellers? A bearish move in Bitcoin and Ethereum will most likely trigger another bloodbath for altcoins. In this context, what are the levels to monitor?
- The $179 billion (a bear market resistance from 2018)
- The 102 billion dollars (a resistance below which the market has evolved for three years)
- The pivot zone of the 2018-2020 range at 50/55 billion
For the moment, although we are seeing a rebound in altcoins with a very short-term bullish trend, it is necessary not to be fooled by a technical rebound. This in no way bodes well for a long-term revival of the financial markets given the current context. If altcoins wish to preserve this momentum, the goal is to register a high above 394 billion. This would allow for an ascending top and bottom, the basis of an uptrend in financial markets if we go by the Dow Theory.
Has bitcoin let go in recent weeks?
Since May 2021, the dominance of Bitcoin has fluctuated between 39.5/40% and 48/48.5%, all with a pivot zone since November 2021 at 43.20%. At the start of June, the momentum of bitcoin dominance was strong. Considering an explosion of 50% dominance, yet another rejection took place on 48.5%. This demonstrates that altcoins have not shown their full potential.
Bouncing off the pivot zone, could we see a strong rally in Bitcoin for the second half of July? This is the preferred scenario given the current context, it would be an opportunity to put an end to the daily trend on the total market capitalization excluding Bitcoin and Ethereum. However, a bearish breakout of the pivot zone is to be considered with a return of dominance to 40%. You must have this scenario in mind, while knowing that the prospect of a maintenance of the pivot zone is to be preferred for the moment.
Ethereum or Bitcoin? What is the most solid cryptocurrency in this period full of uncertainties?
After facing resistance at 0.085 bitcoin in November 2021, Ethereum lost a technical zone at 0.07 bitcoin. Subsequently registering a technical rebound with resistance at 0.075 bitcoin, Ethereum was unable to resume a sustainable rise. Thus, he triggered a powerful downward movement which now puts him in a situation of underperformance against the king of cryptocurrencies. Now resting on a long-term level at 0.055 bitcoin, this has allowed altcoins to recover. This partly explains the fall in dominance.
Although the daily trend is bullish on this pair, the weekly trend is not. Thus, it is imperative to have a bearish scenario. A weekly close below this gray zone with a loss of 0.053 bitcoin will likely lead to further bearish acceleration. Thus, the levels to monitor are as follows:
The bearish scenario will still hold until Ethereum manages to regain the technical level at 0.059 bitcoin.
And the altperp index, what about him?
Each week, I will tackle a different index, available on FTX. These indices are groupings of different cryptocurrencies. If you are concerned about the underperformance of an altcoin alone, you can position yourself on the altperp index. It is a way of considering the rebound of a very specific sector by taking less risk (yes, zero risk does not exist). So, you have understood, the altperp index experiences similar fluctuations, but not identical.
What we can see on the ALTPERP index is the respect of the technical levels which are much more relevant in comparison to the simple total capitalization excluding Bitcoin and Ethereum. Currently, the index is moving between resistance at $1777 and support at $1471/1494. The ALTPERP to be rejected on the resistance with a lower top than the previous one. It is heading towards the pivot zone at $1638.
What we can envisage is a return to the green zone with a breakout of the pivot zone. The objective for the sellers is to push the index below $1494 to put it in a daily downtrend. At the moment we have a bearish signal with a lower top, but no confirmation. Buyers could also come in earlier than expected, on the pivot zone, to try for a new breakthrough of $1777.
Alas, we are already at the end of this first crypto point of the weekend. We have just given an overview of different aspects of the cryptocurrency market. Now you are up to speed on the balance of power between Bitcoin and Ether. As the latter is in an underperforming situation, a new bearish leg could drag the altcoins down with it. Thus, in a few days, the rebound that was built on this first half of July could be erased in favor of bitcoin dominance. In this context, do not let go and watch the levels mentioned on the whole of the technical analysis. Be prepared for the vagaries of the market and adapt according to the price action.
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