Greetings crypto enthusiasts!
Interesting week ahead. ETH is 11.4% away from its all-time high by the time of writing this short crypto market outlook, and Bitcoin is even closer to its own ATH. So why the strange title? Why the 'vs.'?
If you've been around long enough, you might remember from previous cycles that the real altseason starts after ETH has had its run first. Therefore, strong BTC at this point might slow things down for ETH in the short term, and stagnant or declining ETH price means alts won't shine either.
Let's take a look at a couple of charts to analyse where we are right now.
BTC
Starting with the king, within a week, BTC surged from $112k to $122k but didn't quite have enough fuel to test the ATH level at $123k.
Interestingly enough, it crossed the previous range $116k and $120k quite easily, and my hope at this point is for it to hold the psychologically important $120k level and perhaps start ranging for a while above that and below $123k before going for a new ATH with more strength. This would probably be good for alts as well.
Another, maybe more likely scenario is that we'll drop into the familiar range of $116k - $120k. Not bad either, but I would like to see $116k hold this time.
CME Gap
This is something to always keep an eye out for on Mondays.
If you don't know what a CME gap is, here's a short explanation:
Since the end of July, there have been two major CME gaps (seen in the chart below as grey boxes): one got filled almost instantly, while the other took some more time.
Now a new one has emerged. To get it filled, BTC would have to drop to the $117.5k level. Now here's the tricky part. We don't know if or when they get filled. Still, by zooming out, we can see that indeed, they do work like magnets, drawing the price toward the start of the gap.
In many cases, CME gaps get filled early on during the start of the week. If it were to happen this week, it would align quite well with the $116k-$120 range -thesis I mentioned earlier and perhaps offer a good entry point.
ETH
The second biggest cryptocurrency has formed a mini-range between $4165 and $4325, where it spent most of the weekend. I actually have some ETH in a concentrated liquidity pool where I've set my range to a very tight +/-2% and it has been good to see how nicely the ETH price was respecting that! Always good when we don't have to do rebalancing.
Even though I'm not holding that much ETH personally, I'm going to keep watching ETH performance closely and go in on alts more heavily if ETH breaks above this mini-range, for example.
BTC.D
The Bitcoin dominance charts' bullish structure was broken in mid-July and is now showing signs of a little bounce back up.
However, on this daily chart, we can see it's also facing heavy resistance. Ideally, we wouldn't want to see it back above 62.5%, but instead, fall below 60%. This would be great for ETH, great for alts. On the other hand, the bigger the BTC.D percentage is, the more alts will suffer when Bitcoin price drops. Always good to keep in mind.
Conclusion
It might very well be that in the next few months, we could see BTC taking over, then ETH again and so on. As an alt holders, we just need to stay alert as altcoin performance is now more tied to ETH's moves compared to times when ETH was weak and alts followed BTC more closely.
If we want to see a proper altseason, ETH having a good rally is crucial. If that happens, other large caps should be next. SOL, SUI, BNB, HYPE and others. After those, it would be smaller caps while memecoins and other shitcoins rallying would mark the end of the cycle. That is, if we still believe in cycles?
What's your take on this? Let me know in the comments section below.
Thank you for reading, and don't forget to follow for more! 🟢
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