A fairly quiet week for cryptocurrencies, how long will the range last?

In this first crypto spot of the October weekend, let’s see what has happened in recent days. Has the situation changed in the markets? At the moment, we must not forget that we are in an underlying downward trend, which does not make it easier to read the market when the macroeconomic context is tense. A few days ago, for example, the Bank of England was forced to buy government bonds to avoid a continuation of the skyrocketing price of debt. Will other states give in and do the same? What is certain is that the economic problems are far from behind us. This can damage the assets for several months risk of such as cryptocurrencies.

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Cryptocurrency capitalization is still under resistance

The price of the total market capitalization of cryptocurrencies on a 1D scale (Bitcoin, Ethereum and altcoins).

Since last week, the situation has unfortunately not changed much on the market. Cryptocurrencies continue to the side, showing very little momentum. But certain announcements, such as those from the Bank of England, have led markets to temporarily overreact. What is interesting to note is that Last week’s goal has been reached with a bearish rejection at the $943B resistance. Currently, the market still cannot recover this zone, even the 919 billion with a simple bullish close.

Thus, we can see a drop in the price since the second half of September. It is certain that a new movement is approaching, but what direction could it take? Currently, the market is in a new daily range between 943 billion and 856 billion. As long as one of the levels is not broken, the price will continue to move inside.

To start again on a recovery in a few weeks, it will not be a simple task, since in addition to the resumption of the 943 billion dollars, the MA 100 is located at 970 billion, that is the level to be resumed. If the market succeeds, it will easily be able to return to 1000 billion. But for now, the preferred bias is bearish. If the lower gray zone breaks down and the market is unable to overcome the previously mentioned resistances, cryptocurrencies are likely to attack a new low.

Altcoins are still in bad shape

H4 scale cryptocurrency market cap price (excluding Bitcoin and Ethereum)
H4 scale cryptocurrency market cap price (excluding Bitcoin and Ethereum)

You can see that the market did not give the bullish scenario from last week. On the contrary, he favored the fall within the range. Altcoins made a bearish rejection of the 378 billion resistance, especially since the latter coincided with the EMA 200, a very interesting moving center to determine a potential reversal of the structure. Currently, the problem is simple for cryptocurrencies:

  • Retake the resistance represented in red while staying above the EMA200. If they get there, they could probably bounce back toward $388 billion. The target of last week has still not changed for the bullish scenario.

However, if that fails and altcoins cannot regain the MA100 they are below, a $365 billion loss could trigger a bearish scenario. Currently, there is nothing to report as long as a bullish or bearish breakout has not occurred. Note that reading the market can be more complex at the moment when we are in an environment where the course is contracting.

October will probably be a crucial month for Bitcoin

History of bitcoin's dominance over other cryptocurrencies in 1D scale
History of bitcoin’s dominance over other cryptocurrencies in 1D scale

We can notice that the dominance of Bitcoin is still developing below the 41.32% zone. Previous support, this is resistance. Could Bitcoin regain this level and continue to gain strength in the cryptocurrency market? If it succeeds and takes over the MA 100 located just above, it could push up to the daily 200 EMA (black dashed line). But if that doesn’t work out, two scenarios can arise for us:

  • The first is a continuity of the dominance area below 41.32% until Bitcoin manages to overcome it (or not). In this context, a favorable environment could be registered on altcoins if Ethereum could start to rise again.
  • The second scenario would be an acceptance of the price below the short-term trend (MA13/25/32) while registering a new low below 40.60%. This could undermine Bitcoin’s strength in the market and eventually bring it to 40% dominance.

So watch out for dominance, it’s important. It will allow you to decide whether the market is more favorable for hedging via Bitcoin or exposing yourself to altcoins.

What is the balance of power between Bitcoin and Ethereum today?

The price of Ethereum against Bitcoin in 1D scale
The price of Ethereum against Bitcoin in 1D scale

For now, the price seems to be following the bearish scenario that we discussed last week. Ethereum is currently unable to resume an important technical confluence which is the EMA 200 and MA 100. The last time this configuration occurred was in May. If the same happens, Ethereum could be hurt by taking altcoins down with it. So what to consider at the moment?

  • If you have a fairly bullish bias, don’t expect anything incredible until MA 100 and EMA 200 are not recovered. Furthermore, we can see the formation of a local resistance at 0.07 BTC. If Ethereum manages to overcome that, it will be able to push to the upper technical zone (represented in gray).
  • If you prefer the bearish bias that is the case for this analysis of ETH/BTC, you will need to monitor the price reaction over the next few days. A loss of local support at 0.0674 BTC could see the pair return to the blue pivot zone below. The sequel would be important. If Ethereum fails to bounce back, it will be necessary to consider a continuation of the decline with a bearish breakout.

The ALT-PERP index, a relevant tool for cryptocurrency exposure

Altcoin Index Perpetual Futures 1D Scale Price
Altcoin Index Perpetual Futures 1D Scale Price

To complete the analysis, let’s look at an index available on FTX. This allows you to expose yourself to all altcoins. This is interesting in the event that if you thought a rebound would take place, you could be exposed to a basket of assets rather than a single cryptocurrency that could underperform the market. In this case, using the volume profile, we can determine different levels to keep an eye on altcoins.

The most important level is POC, it is the level where the traded volume is the most important. It tends to be support or resistance on different time frames. Furthermore, you can see the contraction of the index between this level and a resistance zone just above. If the index manages to get rid of that as annotated on the graph, a nice bullish push towards $2040 billion could happen. This will be explained by an LVN (Low Volume Node), a price zone where the volume traded is low and the price movements that occur there are larger.

But if there is an acceptance of the price below the POC, it will be necessary to see the 1751 dollars. If this level is broken, a decline towards the low $1697 value area will undoubtedly occur. This could trigger another bearish run that would hurt altcoins. This will of course depend on the course of Bitcoin and Ethereum.

Here we are at the end of this cryptocurrency market point. It is true that at the moment there is nothing incredible to evoke. We are in a series that aims to tire the less experienced players who could burn their wings with leveraged trading. Be aware of a bullish or bearish exit, which can give a new trend to the market. Furthermore, on 13 October we will have the one-year inflation figures for the month of September. It is very likely that the market will not do anything extraordinary until then. Finally, it is important to monitor the balance of power between Ethereum and Bitcoin, as well as the dominance of the latter. They are very important indicators of the turnover of capital and the trends that may arise in this market itself.

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