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Bitcoin and Cryptocurrency in the Green, Be Careful!


On this new crypto point of the weekend, like every Sunday, we will focus on the overall Bitcoin and cryptocurrency market situation by outlining the required bias, technical thresholds to watch and what has happened in class over the past seven days. This will allow us to step back from our previous analysis by asking ourselves whether the scenarios that have been put in place have been confirmed or not.

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Cryptocurrency touches the 1000 billion capitalization mark

Price of the total market cap of cryptocurrencies on a daily scale (Bitcoin, Ethereum, and altcoins).
Price of the total market cap of cryptocurrencies on a daily scale (Bitcoin, Ethereum, and altcoins).

Last week we discussed the resumption of technical resistance at $780B (not shown here) which was the first stage of the uptrend reversal. After they managed to recover $800B and then the resistance at $845B confluence with the MA100, the buyers were able to squeeze for a short time which resulted in a very strong bullish move.

The price of the cryptocurrency capitalization has reintegrated the previous range by restoring the pivot level that was built from September to October 2022, paving the way for a return to the EMA200 which the price has not been found since last April! Although this rally is very interesting, it should not lead you to lower your guard towards the financial markets.

We are at a technical meeting point, the daily EMA200, where it is above the technical resistance at $980B. However, it is important not to rush into current levels of FOMO even though it can be very attractive, depending on your investment thesis, in the long run. Unification with rollback is possible, but to what extent? In order not to break the dynamic, cryptocurrency capitalization could return to $850 billion in order to confirm an upward exit from the range in which prices have developed since November.

Altcoins late?

Cryptocurrency market cap price on a daily scale (excluding Bitcoin and Ethereum)
Cryptocurrency market cap price on a daily scale (excluding Bitcoin and Ethereum)

Regarding the capitalization of altcoins (excluding the capitalization of Bitcoin and Ethereum), we can see that the price is lagging since they have not, for now, reached the daily 200 EMA. Currently, the altcoins are breaking free from the technical confluence of the 100-MA and the $332B resistance level as the price continued to decline in November and December.

Currently, the price is below the $350 billion support that was maintained from June to last October. For now, as the daily momentum is bullish, there is no doubt that a re-entry of this support will open the way for a more sustainable rally in altcoins that can take advantage of it to return to the 200 EMA currently located at the confluence of the $375B pivot area.

Here are the two technical levels that altcoins will have to reclaim if they are to return to the resistance represented in red at $400B. For now, nothing has been decided yet despite the strong momentum we have seen in recent days. To avoid a bearish reconsolidation of altcoins as sellers emerge, the ideal scenario is to hold the price above $332 billion so that it does not fall below the 100 moving average.

Bitcoin once again showing its strength against other cryptocurrencies

Bitcoin Dominance Trajectory vs. Other Cryptocurrencies on a Daily Scale (1D)
Bitcoin Dominance Trajectory vs. Other Cryptocurrencies on a Daily Scale (1D)

Regarding Bitcoin dominance, what happened in recent days is very interesting since the bearish scenario took place before giving way to an upward trend in price dominance. As agreed, the price reversed to the MA100, which led to a very strong start for Ethereum and altcoins. A large number of cryptocurrencies have registered double-digit increases. The liquidity that used to go into Bitcoin has gradually moved to the rest of the market.

However, there was a very strong recovery in Bitcoin which decided to recover as the market leader. Despite the rise in the price of altcoins, this did not prevent the king of cryptocurrencies from absorbing a larger part of the capital, which gives him a chance to return to $21,000 within a few days.

When a major level is reached, it is possible that we will see a decline in Bitcoin’s dominance for some time. This would be an opportunity for the cryptocurrency market to take a breather in order to make a necessary technical pullback if we want a sustained rally in the market.

Ethereum is still moving in the same technical territory

Ethereum price against Bitcoin on the three-dimensional unit of time

Regarding the situation of Ethereum against Bitcoin, we can see that the price is still developing in the upper region of the range built since April 2021. For now, the price is unable to overcome the upper boundary of the range at 0.0789 BTC, especially since the second resistance is at 0.0769. BTC is right below it. If Ethereum can overcome this double resistance, the price is likely to head towards 0.085BTC.

It is kind of a current problem for buyers who are hoping to see a strong price hike. An upward breakout of the range would be an opportunity for Ethereum to lead the market and outperform Bitcoin. This would be an ideal context for altcoins reacting more positively to the rise of Ethereum than to the increases of the cryptocurrency king. However, if the price fails to do so and loses its 3D trend with the 3D EMA, the way is open to return to the MA100 and outperform the asset against Bitcoin.

Decentralized finance is in good shape

DeFi cryptocurrency capitalization price on daily (1D) scale
DeFi cryptocurrency capitalization price on daily (1D) scale

In terms of DeFi cryptocurrency capitalization, the targets mentioned last week have largely been achieved since the price has returned to the range in which it developed between September and November 2022. Reacting to a pivotal area at $44 billion, the price now has a major objective: to stay in The range to stay above the $40 billion threshold.

If this goal is achieved, it would be a sign of the strength of DeFi assets, which should alert investors to the need to keep an eye on cryptocurrencies operating in this sector. The second issue is the resumption of the pivot area that we mentioned. If the price breaks this area higher, it could head towards EMA 200 where the upper boundary of the range is located at $48B.

Here we are at the end of this technical analysis. This has been a very emotional week which will follow persistent risks as the market will have to choose between, on the one hand, a continuation of the bullish momentum favored by a rather weak dollar or on the other hand, a trend reversal that can be prepared by setting a local top at current levels. What is certain is that the rally we just witnessed is strong, and for it to continue, a pullback must be identified.

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