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How Ethereum’s Growth Affects Bitcoin Capitalization

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How Ethereum's Growth Affects Bitcoin Capitalization

How Ethereum’s Growth Affects Bitcoin Capitalization
CONTENT

  • Bitcoin Dominance Lost Important Long-Term Upward Support Line.

  • Bitcoin dominance demonstrates inverse correlation with the ETH / BTC pair.

  • A fall in the indicator below 62% may lead to an acceleration of the decline.

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On March 25, the Bitcoin dominance level peaked at 67.99%, after which it went down. It is noteworthy that on the same day, the ETH / BTC pair was at a minimum and has been growing since then..

Cryptocurrency trader @BillGK_Crypto tweeted a chart of the BTC dominance level, which shows that the indicator has lost an important level of support. Until the indicator returns above this level, altcoins will continue to grow, believes an expert who took Ethereum as an illustration of what happens to alternative coins when Bitcoin’s dominance falls..

$ BTC Dominance

How Ethereum's Growth Affects Bitcoin Capitalization

Consolidating below key W / D3 area after bearish retest.

Overall structure since high remains bearish (bullish $ alts) but considering $ BTC spot, continue conservative sizing.

Reclaim D3 level marked = risk off immediate term. Nice confluence w / $ ETH atm too pic.twitter.com/Lms5VYQDBY

– BillGK (@BillGK_Crypto) April 15, 2020

In this article we will analyze this indicator and try to determine its further dynamics..

Long-term forecast

In the second week of January, the bitcoin dominance level broke through the upward support line, which had been relevant for 763 days. This line turned into resistance, and the indicator continued to fall.

Looking at the closing prices on weekly charts, two main trading ranges emerge..

Support and resistance levels of the upper range pass at 67.7% and 70.7%, respectively. In the case of the second range, support and resistance are located at 53% and 62%.

Now the price is between these two ranges after unsuccessful attempts to break through the upper channel. If the indicator drops below the resistance line of 62%, this will mean a return to the old range with the prospect of a further fall in the direction of the 53% level..

Rebound

Other resistance and support levels are seen on the daily chart. Now the price is in the range of 63% -66.5%, and it is located closer to the middle of this channel.

When trying to determine the direction of the trend movement, two important dates should be highlighted:

March 25, when the rebound triggered a trend reversal, and April 6, when the bearish breakout was followed by the price return to the range.

How Ethereum's Growth Affects Bitcoin Capitalization

On the Ethereum chart, we see identical dynamics, but in the opposite direction.

On March 26, the trend reversed, and the token As the use of cryptocurrencies grows, new types of tokens are emerging. They can represent value or something intangible like voices. Two … More began to slowly rally, accelerating the rally on April 6, when quotes broke through an important resistance.

This mirroring dynamic is very important as Ethereum is the largest altcoin by market cap and its growth has a significant impact on the level of Bitcoin dominance..

So, Bitcoin’s dominance level has lost an important long-term upward support line. Now the indicator is in the neutral zone, but the loss of the 62% level may lead to an acceleration of the decline.

 

Disclaimer

All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..

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