Just a few days ago from Ethereum From Proof of Work to Proof of Stake with integration update. The coming week is likely to be really hectic depending on the events that are going to happen. In parallel with this major ecosystem event, the macroeconomic situation remains unchanged and the war is in full swing in Ukraine. The US dollar has shown some signs of weakness in recent days, but this is not enough to restore the proper context for risk assets. In this context, let’s head over to the cryptocurrency market assessment charts.
The cryptocurrency market has returned to late August levels
Since last week, the market reaction has been perfect at the given levels. After bouncing off the 50% Fibonacci retracement of the previous range, the cryptocurrency is starting to rally again. However, nothing has been decided yet. You can see that the market has been moving below resistance since August 24th. The upside in H4, the $1030B recovery would be a point of hope for the rally to continue. However, beware of expecting a move that could be a false breakout. This is what happened in recent days with a loss of 919 billion dollars to finally resume this level after a few hours.
If it’s rejected back at 1030 billion, watch 980 billion. It was a pivotal level for several weeks, that could allow the market to recover. If the resistance is given up, we can envision a return of cryptocurrency at 1060 plus 1080 billion. Phased targets like these make it possible to get reasonable and safe gains in a market that sweeps up and down the stops of various participants. Will the merger be a catalyst for increased capitalization?
The position of altcoins in the market has not changed
Since last week, despite the moves in Bitcoin and Ethereum, altcoins have also not responded to the upside. The latter is still developing below the pivot area at $393/395B. However, they broke the resistance at 388B and it looks like they are in a complete reversal while maintaining the H4 trend. Pressure below a key level while it struggles to hold on to the 200 EMA, a close above $395B could give altcoins room to run. Of course, this will not be independent of the movements of Bitcoin and Ethereum. Thus, if the latter is not screwed down, an interesting context could be set up over the next week. Do they wait for the merger to succeed before paying?
However, keep in mind that there will be a lot of macroeconomic data released next week which will affect market volatility. If altcoins turn green, the $406 billion target could be possible. However, if altcoins are rejected again in the pivot zone, it will be an opportunity for sellers to step up and raise the capitalization to a minimum of $378 billion.
Will bitcoin rebound before consolidation?
After several weeks and hitting our targets, bitcoin has rebounded (for now) as expected. Currently in an uptrend on the H4 scale, it has slowed below 40.61%. If you can overcome this level to continue absorbing the capital available in the market, the next target is 41.09% dominance. However, an average reaction is possible at 40.68%. Now bitcoin must give it all if it wants to sustain the momentum that the rebound started. Will consolidation be an obstacle?
If it loses 40.25% again, it will be necessary to monitor Bitcoin’s ability to regain (or not) this level. This could be a sign of Bitcoin regaining ground or showing continued weakness against the rest of the market. Thus, the H4 trend should be maintained for the next few days. Next week will be important and will allow for better insight into the coming weeks of September. In this context, let us now analyze the ETH/BTC pair to study the balance of power between the two assets. This will complete the Bitcoin dominance analysis.
Will the merger allow Ethereum to continue its outperformance?
Against Bitcoin, Ethereum reached one of the targets mentioned last week which corresponds to 0.0854 BTC. After establishing local support, Ethereum is now trying to maintain the confluence of the EMA. If that happens, in addition to a return to the current peak, the consolidation could be a factor driving Ethereum higher. In this context, the 2021 summit is not an unexpected and achievable goal. However, I would like to draw your attention to the caution that must be maintained in the current market situation.
If Ethereum sees a nice rally during the summer of 2022, it is not out of the question that the market is anticipating (and pricing) the consolidation. To tell the truth, it is a very complex question whose answer varies according to each event’s approach to this event. We are hitting significant levels against Bitcoin as it starts to take back control? So it is better to be vigilant over the next few days by avoiding positions with a very high share of your capital. If Ethereum starts to fall again after the update, it could catch a lot of investors by surprise. In fact, many are counting on this moment by anticipating a possible rally.
Have private cryptocurrencies failed to maintain decent momentum?
To close this cryptocurrency point at the end of the week, let’s finish our analysis of private cryptocurrencies. After reaching the key resistance level Privacy index FTX shows us that this sector lost its attractiveness during the second half of August. Currently, the indicator is in a range and fluctuates between a sloping support and resistance level. If the FTX Index which is a basket of private cryptocurrencies loses the current VAL, it is likely to return to $963.
In this context, this domestic support must inevitably continue. If the index loses this level in addition to the sloping support, it will undoubtedly be a quick return below $900. At the moment nothing has been decided yet where the index manages to preserve the VAL. This September will certainly see a revival of the trend in the index. Therefore, if you are interested in the private cryptocurrency index, we invite you to follow it closely.
Here we are at the end of this analysis of the cryptocurrency market. So, do you think The Merge will be a catalyst for a bull market rally? Or will it lead to a local top with a big drop in the market? Be on your guard and continue to analyze the balance of power between Ethereum and Bitcoin while observing the dominance of the latter. Next week will (possibly) be very emotional and volatile! Manage your risk as best you can and keep an eye on the key levels identified in this market analysis.
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