It has been engaged with Bitcoin (BTC) in recent months with altcoins suffering as a result and BTC dominance reaching a new local peak of 67.5% over the past few days.
However, a reversal typically occurs once altcoins begin to show such a weakness and altcoin traders are in a depression. The leading indicator for such a u-turn is Ether (ETH), which is now in a make-or-die situation against its BTC pair.
New higher high for ETH in first rise since bear market
The chart above speaks for itself, showing a new rise since the cut above $ 300 earlier this year when buyers in this region stepped up immediately. This was a cut out of a multi-year impoundment range, which increases the likelihood of the bull market continuing.
Since then, Ether’s price skyrocketed to $ 450 and continued its rally toward the recent high at $ 675. If that becomes a temporary high, a correction is likely toward $ 450-480. However, such a correction is very healthy for the markets and should provide fuel for the next impulse wave.
Using the Fibonacci extension tool, such an impulse wave could send the ETH price to $ 900 and possibly even $ 1,300.
December is historically a good month to get into altcoins
Since 2016, the Bitcoin supremacy chart peaked in December, followed by a solid quarter for altcoins.
In that perspective, Bitcoin’s dominance shows a clear resistance zone at the 67% -69% level. It is difficult to call this a resistance zone as the Bitcoin supremacy chart is not a tradable asset. But technical analysis can still be useful in this case.
If the dominance reverses here, then another lower high will be built leading to another peak for December.
Given that the cryptocurrency market is in a bull circle for the first time since January 2018, the potential altcoin runoff can become relatively large in scope. Such a rally could also see Bitcoin supremacy collapse to 48% -50%.
ETH / BTC must bounce to show strength
The weekly chart for ETH / BTC tells the whole story. A cut above the 0.026 sats earlier this year drove the price even higher with Ether rallying towards 0.04 sats – the range resistance from the previous impounding period. This resistance could not break at the same time, after which ETH / BTC decreased significantly.
The main point of interest now is the range between 0.0245-0.026 sats as that zone was the resistance. As long as this area remains, more upside should be expected in the first quarter of 2021.
However, altcoins do not perform well when Bitcoin is volatile. Therefore, Ether and altcoin traders should keep an eye on Bitcoin, which needs to stabilize and / or consolidate to achieve a strong cut.
The views and opinions expressed here are those of the author nor do they necessarily reflect Cointelegraph’s views. All investment and trading moves involve risk. You should carry out your own research when making a decision.