Market Insights and Predictions for Cryptocurrency Traders
As cryptocurrency markets display a bullish outlook, Ethereum is nearing the crucial $4,000 resistance level, while Bitcoin has rebounded from a recent dip to $113,100. However, traders are advised to approach altcoin investments with caution as a sustained rally remains uncertain.
Ethereum (ETH) finds itself on the verge of breaching the psychologically significant $4,000 threshold. Late in July, ETH caught stiff resistance around $3,941, but at the time of this report, it was just shy of that pivotal mark.
The cryptocurrency is grappling with elevated selling pressure even as it attempts to approach this nearby round-number resistance. However, on-chain data indicates heightened activity, which has the potential to bolster demand for ETH and support a sustained rally.
Interest from institutional investors and corporate treasury firms is climbing, strengthening the view that Tom Lee’s ambitious prediction of a $6,000 valuation for Ethereum may not be far-fetched.
Considering the selling pressure on Ethereum, we analyze Bitcoin Dominance (BTC.D) alongside altcoin market capitalization to help traders determine if it’s time to take profits.
Current Trends in Bitcoin Dominance and Market Capitalization
Source: TOTAL2 on TradingView
The altcoin market capitalization has been oscillating within a defined range since July, specifically between $1.34 trillion and $1.54 trillion. As of this writing, TOTAL2 is positioned at $1.5 trillion, with the potential for slight expansion before hitting local range limits.
Traders should brace for the continuation of this range until a breakout occurs. Attempting to capitalize on breakouts as prices near these extremes can lead to significant losses.
Hence, until the altcoin market cap surpasses $1.54 trillion, traders might want to avoid placing bets on imminent breakouts.
Following a rebound from $113.1K earlier this week, Bitcoin’s positive momentum has lifted several altcoins, particularly Ethereum, instilling a sense of optimism in the broader cryptocurrency market.
As such, traders holding long positions in altcoins may consider locking in profits and awaiting the next significant move in the market.
Source: BTC.D on TradingView
The BTC.D chart has also been trapped in a range for the last three weeks, currently resting at a local support level. A recovery from here could signify Bitcoin’s continued outperformance against altcoins.
While Ethereum is likely on track to achieve new all-time highs, spurred by ongoing strong corporate demand, this anticipated breakout might not take place immediately.
Considering the present dynamics in altcoin market cap and Bitcoin dominance, risk-averse traders may find it prudent to secure profits now instead of waiting for an imminent breakout.
Disclaimer: The information presented does not constitute financial, investment, trading, or any other type of advice and reflects solely the writer’s opinion.
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