This month couldn’t have got off to a better start.
After the huge Bitcoin pump we saw in late October, where the price of BTC increased over 40% in the space of 24 hours, it seems the market has now stabilised.
I personally expect the positive trend to continue this week following the recent news that President Xi Jinping wants China to be a key player in the blockchain space.
It’s notable that following Xi’s comments, there was a massive surge in searches for “blockchain” and “Bitcoin” on WeChat.
In addition, the endorsement for blockchain may kick-start a wave of adoption by the Chinese, especially by businesses, just as the brand new government-backed cryptocurrency is getting ready to launch.
Let’s take a look at the current state of the cryptocurrency market.
Bitcoin dominance (BTC.D)
Bitcoin’s market dominance is now close to 68% after dropping slightly from 70% since late October.
This was to be expected given there are a lot of altcoin speculators and investors in Asia who saw the China blockchain news as a huge boost. After the initial spike in BTC/USD, we see there’s a sudden move from Bitcoin into altcoins as the market stabilised.
I argue that some investors have taken a gamble on altcoins and will soon profit from short-term gains if Bitcoin pumps again.
Let me further my analysis by looking at some of my favourite altcoin/Bitcoin pairs.
Hopefully there’s still a good opportunity to scoop some key cryptocurrencies before the altcoin market pumps massively again.
The first thing I notice in the chart above is that ETH/BTC has recovered after dropping below all its EMAs in October. It is now above its 20-day EMA and is trying to consolidate above its 50-day EMA.
With some more fresh cash coming into Ethereum, mainly from Tether and Bitcoin, I expect the altcoin to rise above its 200-day EMA before the end of the year.
Last month, I mentioned how the volume profile on the left shows there’s some support for ETH/BTC…