The past few months have been all about Bitcoin (BTC), with altcoins suffering and BTC dominance hitting a new local high of 67.5% in the past few days.
However, a reversal usually occurs once altcoins show such significant weakness and altcoin traders are in a slump. The main indicator of such a turnaround is Ether (ETH), which is now in a life or death position over its BTC pair.
New higher high for ETH in the first upward trend since the bear market
The graph above speaks for itself and shows a new uptrend from the breakout above $ 300 earlier this year when buyers entered this region immediately.. This was a breakout of a multi-year accumulation range that increased the likelihood that the bull market would continue.
Ether’s price has since broken above $ 450 and continued to rally towards the recent high of $ 675. If this becomes the temporary spike, a correction towards USD 450-480 is likely to take place. However, This correction is very healthy for the markets and should fuel the next wave of momentum.
With the Fibonacci extension tool, such a wave of momentum could push the ETH price to $ 900 and possibly even $ 1,300.
December is historically a good month to enter altcoins
Since 2016 Bitcoin’s dominance chart peaked in December, followed by a solid quarter for altcoins.
In this perspective, the dominance of Bitcoin shows a clear zone of resistance between 67% and 69%. It’s hard to call this a zone of resistance as the Bitcoin dominance chart is not a tradable asset. In this case, technical analysis can still be helpful.
If the dominance reverses here, another lower peak will form, resulting in another peak for December.
With the cryptocurrency market in a bull cycle for the first time since January 2018, the possible execution of altcoins can be relatively large. In such a rally, Bitcoin’s dominance could also drop to 48% to 50%.
The ETH / BTC pair needs to ricochet to show strength
The ETH / BTC weekly chart tells the whole story. A break above 0.026 sats earlier this year pushed the price even higher, with ether rising towards 0.04 sats, the resistance area of the previous accumulation period. This resistance could not be broken all at once, as a result of which the ETH / BTC fell significantly.
The main area of interest now is the 0.0245-0.026 sats area, as this zone used to be resistance. As long as this area is maintained, further benefits are expected in the first quarter of 2021.
However, Altcoins don’t work well when Bitcoin is volatile. Hence, ether and altcoin traders should keep an eye out for Bitcoin, which needs to stabilize and / or consolidate to ensure a strong breakout.
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement involves risk. You should do your own research when making a decision.