This week couldn’t have got off to a better start.
After the massive Bitcoin pump we saw on Friday, where the price of BTC increased over 40% in the space of 24 hours, it seems the market has now stabilised.
Nevertheless, I expect this week to maintain the positive trend following the recent news that President Xi Jiping wants China to be a key player in the blockchain space.
It’s notable that following Xi’s comments, there was a massive surge in searches for “blockchain” and “Bitcoin” on WeChat.
Will the positive momentum spill over into the altcoin market? If so, which cryptocurrencies could see a trend reversal in the upcoming weeks?
Let’s take a look at the current state of the cryptocurrency market.
Bitcoin dominance (BTC.D)
If there were any doubts that new money comes mostly into Bitcoin, the Bitcoin dominance chart doesn’t lie.
As we can see above, there was a sudden 4% spike in Bitcoin’s dominance over altcoins, showing that money was flying from altcoins into Bitcoin.
BTC.D is now back above all its EMAs on the yearly chart at over 70% dominance.
This was to be expected given there are a lot of altcoin speculators and investors in Asia who saw the China blockchain news as a huge boost. After the initial spike in BTC/USD, we see there’s also a sudden move from altcoins into Bitcoin.
I argue that some investors took a gamble on altcoins, and with the recent news, they saw an opportunity to secure some of their gains by moving into Bitcoin.
Let me further my analysis by looking into some of my favourite altcoin/Bitcoin pairs.
Hopefully, with the recent downturn for altcoins, there’s a good opportunity to scoop some key cryptocurrencies before the altcoin market pumps massively again.
ETH/BTC
The very first thing I notice in the chart above is that ETH/BTC is below all its EMAs, which is opposite to the BTC.D chart shown earlier.
Do I expect Ethereum to start recovering soon? It all depends on where the money is flowing, but I usually prefer to respect the current trends. At the moment, it doesn’t look good for ETH.
The volume profile on the left shows there’s some support for ETH/BTC just above 1,800,000 sats, which means we could expect to see Ethereum consolidating at this price level.
ETH recovered from around 1,600,000 sats in early September to over 2,300,000 sats in mid-October, representing a 31% increase in price.
Shortly after, the Bitcoin market started its recovery and Bitcoin pushed 40% higher versus the US dollar. That pump put downwards pressure on Ethereum, which tanked its price below 1,950,000 sats.
When the coin finally starts its recovery, there’s strong resistance around 2,000,000 and 2,300,000 sats, where ETH was previously consolidating before the drop.
XRP/BTC
Much like ETH, Ripple (XRP) is also suffering from a downtrend.
However, even though the coin is trading just below its 20-day EMA, it’s showing signs it wants to start its recovery.
After the massive BTC pump last week, XRP experienced a 23% drop against Bitcoin that took the altcoin from around 3,700 sats to 3,000. Since then, XRP has recovered to around 3,200 sats where it’s currently sitting.
Looking at the volume profile, there’s strong support around this level, with weak resistance until around 4,000 sats. If there’s a sudden pump, we could see XRP breaking through its 20-day and 50-day EMAs with relative ease. The next strong resistance levels appear at over 5,000 sats and then again close to 8,500 sats.
For the moment, I expect XRP to consolidate for a short period before a pump towards 4,000 sats.
BCH/BTC
The chart for Bitcoin Cash (BCH) is not looking great.
The first thing I immediately notice is that most of the trading volume is happening around the levels where BCH is currently sitting.
In addition, price has continuously been touching the 2,700,000 sats level since mid-July without breaking through. That’s not a good sign.
As you know, the more times a cryptocurrency touches any given level, the higher the chances are that price is going to break said level. Therefore, if BCH does not recover soon over its 50-day and 200-day EMAs, I expect price to drop below 2,500,000 sats.
Looking at the current trend, I expect Bitcoin to pump a few more times before the gains start spreading into key altcoins, such as Bitcoin Cash.
Given the above scenario, we could definitely see BCH going towards yearly lows before another push.
NEO/BTC
If you are looking for a gem that is outperforming the market, look no further than NEO.
NEO is currently one of the best-performing altcoins versus Bitcoin and is showing positive signs of maintaining its trend. As reported yesterday by Coin Rivet, the altcoin pumped 40% versus the US dollar following President Xi’s announcement.
Looking at the graph above, there are three main reasons why I’m bullish on NEO. The first is that price broke through a major resistance level with ease at around 90,000 sats. The second is that NEO is now trading above both its 20-day and 50-day EMAs. Finally, the altcoin is currently looking to break a major resistance level at around 160,000 sats.
If NEO maintains its uptrend and consolidates near its 200-day EMA, we could see the cryptocurrency breaking above 150,000 sats soon.
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Safe trades!
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.