Breaking down the Ethereum/Bitcoin chart indicating a potential momentum shift
It has been an exciting month for the cryptocurrency industry, especially for the largest digital asset. Bitcoin reached a new all-time high of $67,000 earlier last week. However, rather than pushing forward with renewed market momentum, BTC showed faded strength on the charts.
For the most part, Bitcoin rallied the collective industry this month. Over the past few days though, the asset corrected by more than 10%, dropping momentarily below $60,000.
However, at press time, the asset had recovered and was close to $63,000. Having said that, there is another coin, waiting in the wings, and over the course of next week, it might be on the bullish wheel.
Ethereum taking Bitcoin for a ride?
An article on AMBCrypto last week, discussed the likelihood of an altcoin season down the line, but the dynamics have relatively changed over the past few days. BTC was expected to surge above $70,000 after its ATH breach. However that hasn’t been the case and consolidation may have settled in early.
Now, keeping that in mind, the ETH/BTC chart is indicative of multiple signs which suggest that it might be Ethereum‘s week to establish bullish momentum.
As observed, the ETH/BTC breached above the declining resistance that has been held since the beginning of September. It was tested a couple of times on 16 September and 3 October, 2021, but on 23 October, ETH/BTC established a position beyond the resistance.
Another bullish pattern observed in the chart was the formation and breach of a monthly double bottom. On 23 October, ETH/BTC also moved and closed a candle above the pattern, which can be taken as a further confirmation of the bullish pattern.
With Ethereum meeting a bit of resistance at $4150 at press time, a breach above $4200-$4300 may witness the largest Altcoin take charge over the next few days.
Altcoins to benefit from ETH’s market rage?
Further, it is quite clear that liquidity flowing into Ethereum would indirectly impact other alts’ rallies in the market as well. As per Skew data, Ethereum Classic and Chainlink are most likely to follow Ether. With a strong correlation of 0.89 and 0.84 with ETH, both ETC and LINK struggled over the past few weeks to establish bullish momentum.
With Ethereum breaching above and potentially reaching a new-all time high, ETC and LINK may follow suit as the assets looked to breach their own respective, $60 and $40 resistance levels at the moment.Source