Ethereum is the largest altcoin by market capitalization despite after undergoing sharper depreciation this year than most of its peers. Even while some cryptocurrencies were surging in price during periods of the year, Ethereum continued its downward spiral. Many are anticipating that a new altcoin bull market may be about to start with Bitcoin maintaining above the $6k mark and many cryptocurrencies starting to form higher highs and higher lows. We analyze the altcoin leader Ethereum to get a better sign as to whether a bull market for altcoins can be expected.
Ethereum represents 21% of the total market cap of all altcoins. Its movements can have a significant impact on the confidence in other altcoins. Ethereum has suffered more than most during this bear market moving from a high above $1400 to a 2018 low of around $170. It has since started to make moves back up mostly forming higher highs and higher lows, currently trading around $223.
Although higher highs and higher lows is a sign of an uptrend, price and RSI has since started to consolidate showing some indecision in the market. This mirrors the situation in market leader Bitcoin that is also undergoing a consolidation.
With Bitcoin representing 52% of the total cryptocurrency market cap, the performance expected from altcoins still largely depends on it. Bitcoin has been forming a triangle pattern since January, and many are anticipating a bullish or a bearish breakout shortly. The volatility in Bitcoin is trading at its 2018 lows as measured by the average true range with volatility lows typically followed by a spike.
Traders who are anticipating an altcoin market should closely monitor Bitcoin as Ethereum is also mirroring it closely as of recent. How this triangle pattern plays out will be important for the performance of the altcoin market. If a bearish breakout occurs in Bitcoin and it returns below $6k, it is likely we will see a further loss of confidence in altcoins and the hopes of a bull market will be halted.
- Ethereum recording bullish movements since forming its low of 2018 but has since started to mirror Bitcoin and consolidate.
- Many are anticipating a bullish or a bearish breakout in Bitcoin.
- Important for traders to monitor how the triangle pattern plays out in Bitcoin as it will likely have a significant impact on the altcoin market.
- A bearish breakout with a return below $6k for Bitcoin will likely result in a further loss of confidence in altcoins and a halt to hopes of a bull market.
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