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We returned to the Ethereum price in May 2022, when it was trading at about $1,800, but this time the price movement is in the middle of an ascending broadening wedge, with some accumulations in support and resistance levels within the pattern.
Scenario 1: Ethereum may continue to accumulate around $1,800 before breaking through the $2,000 price level and surging to $2,100.
Scenario 2: If the price of Bitcoin declines, Ethereum may follow closely and sweep some liquidity over the $1,700 price level, which is also the support side of the ascending expanding wedge, and maybe make a bounce.
Scenario 3: Ethereum price movement is forming a descending wedge pattern within an ascending developing pattern; it may return to complete the pattern up to the support side.
Bitcoin dominance is a measure of Bitcoin’s market capitalization relative to the total market capitalization of all cryptocurrencies. A high Bitcoin dominance indicates that Bitcoin is dominating the cryptocurrency market, while a low Bitcoin dominance indicates that altcoins are gaining popularity.
Several factors can affect Bitcoin’s dominance, including:
- The price of Bitcoin: When the price of Bitcoin rises, it attracts more attention from investors, which can lead to an increase in Bitcoin dominance.
- The price of altcoins: When the price of altcoins rises, it can lead to a decrease in Bitcoin dominance.
- The release of new altcoins: The release of new altcoins can lead to a decrease in Bitcoin dominance, as investors allocate their money to new projects.
- Regulatory changes: Regulatory changes can affect the cryptocurrency market, which can lead to changes in Bitcoin’s dominance.
Here are the possible scenarios of Bitcoin dominance and altcoins:
- BTC.D goes down, BTC stable or up = Alt season: This means that the total market capitalization of all cryptocurrencies is increasing relative to the total market capitalization of Bitcoin. This can be a bullish signal for altcoins, as it indicates that investors are becoming more interested in alternative cryptocurrencies.
- BTC.D goes up, BTC up, Alts bleed against BTC: This means that the price of Bitcoin is rising faster than the price of altcoins. This can be a bearish signal for altcoins, as it indicates that investors are moving their money out of altcoins and into Bitcoin.
- Both BTC and BTC.D are in critical resistance: This means that the price of Bitcoin is at a key resistance level. If the price of Bitcoin breaks below this level, it could lead to a sell-off in the cryptocurrency market.
Investors can use Bitcoin dominance to help them make investment decisions. For example, if Bitcoin’s dominance is high, it may be a sign that the cryptocurrency market is overvalued and that investors should consider moving their money into altcoins. Conversely, if Bitcoin’s dominance is low, it may be a sign that the cryptocurrency market is undervalued and that investors should consider moving their money into Bitcoin.
If Bitcoin’s dominance declines, the total market capitalization of all cryptocurrencies rises relative to Bitcoin’s total market capitalization. This might be interpreted as a positive indication for altcoins such as Ethereum, indicating that investors are becoming more interested in alternative cryptocurrencies.
Ethereum is currently showing signs of a retest from its recent breakout from the Descending Wedge. The Descending Wedge is a technical chart pattern that is formed when prices make lower highs and lower lows, with a descending trendline connecting the highs and a horizontal trendline connecting the lows. A breakout from a Descending Wedge is considered to be a bullish signal, as it suggests that the bears are losing control of the market and that the bulls are taking over.
In the case of Ethereum, the price broke out from the Descending Wedge. Since then, the price has been consolidating in a range between $1,840 and $1,950. If the price can break out from this range to the upside, it could target the next resistance level at $2,000. However, if the price breaks down from the range, it could retest the support level at $1,800.
Scenario 1: The price breaks out from the range to the upside and targets the next resistance level at $2,000. This would be a bullish signal and could lead to further gains in the price of Ethereum.
Scenario 2: The price breaks down from the range and retests the support level at $1,800. This would be a bearish signal and could lead to further losses in the price of Ethereum.
Scenario 3: The price consolidates in the range between $1,840 and $1,950 for an extended period. This would be a neutral signal and could lead to either a bullish or bearish breakout in the future.
The price of Ethereum is currently forming a bearish bat pattern. This pattern is a type of harmonic pattern that is often seen in the cryptocurrency market. To complete the pattern, the price of Ethereum must increase to $1,980. If it does, the price of Ethereum will likely start to trade lower.
The bearish bat pattern is formed by five waves. The first wave is a wave of uptrend, the second wave is a wave of correction, the third wave is a wave of uptrend, the fourth wave is a wave of correction, and the fifth wave is a wave of uptrend. The fifth wave is usually the strongest in the pattern.
If the price of Ethereum can complete the bearish bat pattern, the price of Ethereum will likely start to trade lower. This is because the pattern is a sign of weakness in the market. However, it is important to remember that the pattern is not always accurate. The price of Ethereum could continue to trade higher even if the pattern is completed.
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