Ethereum (ETH) yesterday broke down through a key market structure on its Bitcoin trading pair, but was quickly caught on a historical support. The break came after two tests of the level in recent weeks.
The fall seems to have stabilized at this level, with higher strength on lower timeframes such as the hourly and four-hour. If ETH/BTC could quickly climb back above the broken trend line and re-enter the structure, the movement could be counted as an overall show of strength.
Owing to the strength of this region of support, the above scenario does not seem too unlikely: ETH has little room left to fall on the BTC pair, as it is already trending not far from very deep and thick lows – levels not breached since March of 2017. This level lies at 0.024 BTC, roughly 20% down from here.
Moving to the ETH/USD(T) pairing, things are looking less bad. Ethereum here has also taken a sharp dip in the last few days; but has been stone-cold stopped within a zone of solid uptrend, firmly within the market structure.
This strong showing on the USD(T) pairing gives us an auspicious feeling for the BTC pairing – ETH being the second crypto of the industry behind Bitcoin, price action on the USD(T) side of things is very important. It’s when ETH breaks this pairing structure, too, that we should start to worry.
ETH/USD(T) is also clearly consolidating within a symmetrical triangle pattern, on the back of a clear bull flag. Thus, the trend remains bullish overall – a break up from the pattern, eventually, is probably more likely than a break down.
Should ETH/USD(T) break down, however, support must hold around $156. If it fails to hold there, Ethereum – and all altcoins, given ETH’s tendency to lead the non-Bitcoin market – will be in for a bad time.
This brings us to our final point: the altcoin market dominance chart, below.
Bitcoin’s crucial breakout on April 2 caused value to flow out of altcoins and into Bitcoin, to ride the wave up. This is (still) a very typical feature of the cryptoasset market.
We can note, however, that altcoins have reached a critical level of support. Although altcoin market cap may dip further into this zone, it seems unlikely that such dips will last long. Traders should be on the look out for some kind of bounce here, as has occured in the past (August 2018, for example).