Bitcoin Regains Dominance – What to Expect Next Week?

A new week is coming to an end on the cryptocurrency market, but not just any week. The year-on-year inflation numbers haven’t come down as much as the market expected. The Merge went very well but for all that, it was not enough to revive the market. Some investors are expecting a 100 bps rise in interest rates over the next week. This will be a big catalyst that should lead us to closely monitor the events of the coming days. Especially since Bitcoin is starting to come back strong.

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A market that always evolves in its range

H4 scale cryptocurrency total market capitalization price (Bitcoin, Ethereum and altcoins)

This week, the market failed to overcome its resistance zone at $1030 billion. Retracing sharply lower following the release of data on the US economy, the price had nothing to do with certain technical levels and put local support at $943 billion before the Merge. However, continuing to unscrew downwards, the market now holds above 938 billion dollars. The current objective is to overcome the 943 billion to hope for a rebound of greater amplitude.

For the moment, we are still in this range which dates back to the end of August. Although significant movements have taken place, nothing tells us that the market will not go back towards the resistance at 1030 billion. If the 943 billion are regained, it will be necessary to monitor in H4 the ability of the market to recover the 964 and 984 billion where the MA100 and the EMA200 are located respectively. If it does, the market will probably be able to push higher.

However, a loss from current levels with the price closing below $898 billion will be a downside breakout of the range. Thus, there will be a good chance of returning to 835/845 billion dollars.

Altcoins are below a technical threshold

H4-scale cryptocurrency market capitalization price (excluding Bitcoin and Ethereum)
H4-scale cryptocurrency market capitalization price (excluding Bitcoin and Ethereum)

For altcoins, the situation is similar to that of the total capitalization combining Bitcoin and Ethereum. You can see that it was impossible to retake the pivot zone at 393/395 billion dollars. The target of 378 billion mentioned last week has been achieved. In addition, altcoins are now trading below this level which has been resistance since September 13th. If there is a bearish rejection below this level with a loss of 373 billion, the market will likely revisit its September low at 363 billion.

However, if the altcoins manage to get into a bullish momentum in the short term and retake the current resistance, it will be necessary to monitor the reaction of the price on higher levels such as the EMA200 which is currently at 387 billion. of dollars, in confluence with the level at 388 billion. It is clear that a rebound of this magnitude would allow certain altcoins to do well by registering nice increases. In any case, as long as the pivot zone at 393/395 billion will not be resumed on the market, it is useless to hope for an upward trend of the order of several weeks.

Bitcoin dominance continues its momentum

H4 Scale Bitcoin Dominance Course
H4 Scale Bitcoin Dominance Course

The bias identified last week on bitcoin dominance was the correct one. The asset thus continued to gain strength by resuming the EMA200 on the H4 scale. Now, after making a false breakout of 41.32%, the asset has bounced off the MA100 and also held above the EMA200. This is a first since since mid-June, the asset has continued to be rejected on these two moving averages. The latter reflect the trend of an asset relatively well. From now on, the challenge is not to lose these two averages and to take the 50% Fibonacci upwards, a technical level below which the price is currently evolving.

If the 41.32% is taken up and maintained, we can consider a continuation of the uptrend. Thus, the objective will be a return to the red zone at 42.25% which represents the confluence of the EMA200 and the MA100 on a daily scale. If Bitcoin shows a real renewed interest from investors, it does not seem unreasonable to establish a return of dominance on the blue zone to 43.20% within the next few weeks. This could put Ethereum and altcoins aside for a while.

Ethereum Lost Major Levels Against Bitcoin?

Price of Ethereum against Bitcoin at 1D scale
Price of Ethereum against Bitcoin on the scale 1D

From now on, we find ourselves on a daily time scale to take a step back on the situation of Ethereum against Bitcoin. We can see a nice exit from the range which was accompanied by a strong downward movement by forming a top and a trough lower than the previous one. The trend is therefore bearish, especially since Ethereum has not been able to stay above the upper limit of the range. Currently, it is below the gray zone at 0.073 BTC. If it does not re-enter this level, we expect the asset to return to the EMA200 and MA100. Depending on the price reaction, we will have to adapt our scenario.

We can envisage Ethereum maintaining above this confluence of averages to re-attack the short-term trend that is forming from the 13/25/32 EMA. However, if Ethereum fails to hold and loses 0.0682 BTC, it will likely return to its daily pivot zone at 0.0651. Such price momentum could allow Bitcoin to regain dominance and sideline altcoins in the coming weeks.

Decentralized finance losing its attractiveness

DeFi Index Perpetual Futures daily price
DeFi Index Perpetual Futures daily price (1D)

This FTX index represents a set of decentralized finance tokens. Thus, you can expose yourself to this sector on the rise or fall without investing in a single asset that risks underperforming. Note that the index is currently moving in a range between a high of 4091 dollars and a low of 1966 dollars. As long as a breakout is not made, the price will always move in this range. Currently, the index has lost several key levels and is in a downtrend. Moreover, he just lost an HVN as well as the 50% Fibonacci of the current range.

If he does not manage to break free on the rise of these new ones, it will be difficult to establish a bullish objective. For now, it preserves the LVN of the volume profile. However, if it loses this level as well as the $2585, the index could very quickly propel itself towards $2276. For now, keep in mind that we are in a compression within the downtrend. Thus, very soon, a significant movement will take place. To hope for a return to the rise of the index over the next few weeks, it will imperatively have to overcome 3060 dollars.

Here we are at the end of this point on the crypto market after an incredible week, especially on the fundamentals of the ecosystem! However, it is not over yet since the one that opens tomorrow will be very important for the financial markets according to the Fed’s decision on interest rates. Notice that the whole market is in a downtrend. Many assets are on the lower limit of the range in which we have been evolving for a while. Also note that Ethereum is in a moment of weakness. At the same time, Bitcoin is gradually taking over the role of market leader. Will this dynamic continue or Ethereum will resurface? Watch the levels and scenarios identified within the analysis in order to be prepared for the vagaries of the market over the next few days.

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