Cold shower for altcoins – Bitcoin was hit by the case FTX, and altcoins have not been spared. Indeed, within a few days, Ethereum has dropped over 30% fetching a price below $1,100. While the situation is delicate, it would seem that the whales proceed to purchase. Was this finally the final capitulation, or was the worst yet to come? Let’s take a look at the altcoins situation graphically!
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Ethereum on the way to a change in dynamics in the medium term?
We said it in the introduction, Ethereum has given up 30 % because of the bad news generated by the FTX platform. In contrast, Ethereum (ETH), like the Binance Coin, has not made another low since last May. Ethereum shows up solid given the situation:
The situation is not catastrophic for Ethereum in this unit of time. The trend is bearish since the breakout of the zone at $1,900but buyers have responded at the level of the $1,000 monthly support. Buyers have the opportunity to change momentum and mark a double bottom in the event of a close above the resistance. For the moment, the course remains brittlebecause all the returns at the level of the institutional bias (EMA 9/EMA 18) are rejected. Also, the price always evolves under the bearish trendline. It will be necessary to exceed the downward trendline and change dynamics to hope for a return to the rise on this asset.
The momentum is always bearishstuck under the bearish trendline. Here again, it will be necessary to go beyond this resistance to find colors.
Ethereum bearish in the short term
Ethereum remains on lows and highs descendants since August 2022:
Ethereum is in a tidy Between $1,000 and $1,900, but since the August high, sellers seem to be in control. Given the situation, a rejection at the level of institutional bias and a return to the level of weekly support should not be overlooked (red arrow scenario). It would then be a new pressure on the support which could well yield.
A scenario bullish could be set up in the event of a fence above $1,680. Indeed, such a close would mark a new high and, thus, show that buyers are present. Attention, the price would then quickly find resistance at the level of $1,900.
The momentum is always brittlewe see that the RSI is struggling to exceed the zone at 60. This zone has been resisting since November 2021.
Imminent rebound for Ethereum against Bitcoin?
The ETH/BTC pair is in a weekly range. Since The Merge, Ethereum was showing fragilitybut it seems that the second capitalization is recovering against the king of cryptocurrencies:
At the moment, Ethereum is solid against bitcoin. The pair’s price is moving above the intermediate support and above the bearish trendline initiated in December 2021. Currently, the price is at the level of institutional bias upward oriented. The scenario bullish is represented by the green arrow where the course bounces and exceed the resistance. If this scenario happens, the resistance will have to turn into support and that the price definitely leaves the weekly range.
The scenario bearish is represented by the red arrow on the graph. If the sellers prevail, the intermediate support and the bearish trendline would give way, and the price would then return to the support in bottom of range. This scenario would really not be positive for altcoins.
For its part, the momentum is brittleit will be necessary to exceed the bearish trendline initiated in August 2022. The momentum is trying to change momentum, this will have to be confirmed by closing above 62 then 73 of RSI.
Bitcoin dominance remains fragile
The dominance of bitcoin could fall in the next weeks :
The dominance of Bitcoin is in a tidy between the upper limit at 48% and the lower bound at 40%. Recently, institutional bias has crossed bearish and the course could be done dismiss at the EMA level. In the event of a fall, dominance could find support around 39% of dominance. The weekly support will have to become a resistance to hope for a outperformance altcoins versus bitcoin.
Be careful, in the event of a fence above 42% of dominance, the dynamic would change and capital would flow into Bitcoin. The momentum is brittlea new rejection could appear at the bearish trendline in the coming days.
To analyse on chain : the whales buy the dip
Whales are entities with more than 1,000 BTC. For Ethereum, it may be interesting to look at the behavior of entities with more than 10,000 ETH :
As can be seen, these entities have distributed during the period from July 2021 to January 2022. Then, in March 2022, these entities began to accumulate despite the asset falling below $1,000. More recently, in November 2022, the whales returned to thepurchase.
From these data, one might think that the phase of distribution is over and the phase ofaccumulation continues, even after the FTX debacle. It is the same observation at the level of potential validators for ETH 2.0:
Ethereum recently upgraded to proof of stake, it was the event of the month for September. Since then, the curve of the number of potential validators is onlyincrease, especially since early November. It seems there is a operator confidence towards this asset which has just passed Proof of Stake.
Ethereum is still fragile on a weekly basis, but buyers have the opportunity to change momentum by retrieving resistance at $1,900. In the shorter term, buyers would need to push to mark a new high above $1,680. Against Bitcoin, Ethereum remains solid and, despite the sinking of FTX. The whales seem to continue to accumulate, they have even been particularly interested since the beginning of November. Could the end of the year be a bit sunnier?
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