The new year couldn’t have got off to a better start for Bitcoin.
After the significant Bitcoin pump we saw last week, where the price of BTC increased close to 20% in the space of a few days, it seems the market has now stabilised.
Nevertheless, I expect this week to maintain the positive trend following the recent price action.
Let’s take a look at the current state of the cryptocurrency market.
Bitcoin dominance (BTC.D)
As you can see in the chart above, courtesy of TradingView, there’s been a sudden 2% drop in Bitcoin’s dominance over altcoins, showing money has been flying from Bitcoin into altcoins this past week.
However, BTC.D is still above all its EMAs on the yearly chart with close to 70% dominance.
I argue that some investors are taking a gamble on altcoins following the recent market upturn. If price does appreciate, we could soon see a move from altcoins back into Bitcoin as traders secure gains.
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.
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 soon.
At the moment, Ethereum is trading at around 1,700,000 sats.
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. The positive trend lasted until December 2019.
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.
For the time being, it seems ETH is still at the perfect range for accumulation.
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.
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.
You can see that most of the trading volume is below where BCH is currently sitting, a sign of positive volume coming into the BCH/BTC market.
In addition, price has continuously broken the 2,700,000 sats level, which had been a barrier since mid-December 2019.
Bitcoin Cash has broken all its EMAs and is now sitting close to 3,300,000 sats. Since the start of the year, BCH has increased over 20% in price.
Given the above scenario, we could definitely see BCH going towards the 5,000,000 sats level soon.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.