While the story of the day is Bitcoin’s move and consolidation above $10,000, the altcoins with momentum already in the bag are surging. Chief among the altcoins in market capitalization is Ethereum, with the second-largest cryptocurrency in the market shooting through the roof. Buoyed by the Bitcoin breakout, Ether has mounted a market capitalization of $36.1 billion with a 24-hour price increase of 6.4 percent.
Looking at the daily chart of Ethereum, yesterday’s breakout was preceded by incredibly bullish momentum, unlike the ongoing price movement which had been persisting for the past few months. Beginning on 21 July, the price began to move up, first breaking the resistance level at $248.53. The next to go was the psychological mark of $250 the very next day as the Bitcoin bulls from its move over $9,500 came over to the Ether market.
By 24 July, two days before Bitcoin’s five-figure breakout, Ethereum registered an 18.92 percent hike in 3 days and was priced at $279.74, closing in on its 2020 high. The next resistance was placed at $285.37, which proved a problem for the altcoin in February 2020 when it hit and fell below the level on two occasions, before dropping down below $250 and then heading into Black Thursday, eventually taking the price down to double-digits.
On 25 July alone, the price rose by 9.34 percent, an unprecedented rise taking it to its highest price point in 12-months at $305. With such momentum already present in the ETH markets, the Bitcoin bulls added fuel to the fire. As Bitcoin and the collective market rose, Ethereum surged past $320 and was then trading at $324, its highest price since June 2019, at the time of writing.
While much credit can be given to both Ethereum’s momentum and Bitcoin’s timely push, the larger and longer trend for the latter pointed to a drop initially.
Ethereum saw lower highs mounted in its long-term daily chart, peaking every few months, trading sideways, and then falling back down. Since the end of March, the ETH price had been trading in the parallel channel between $216 to $248 as the entire market’s volatility tanked. Owing to this bleak situation, a move down was more likely than a move up. However, ETH bulls together with Bitcoin’s $10,000 push defied the technicals and pushed the altcoin into trading at a massive high.
Ethereum posting the biggest gain in price and market dominance in the recently concluded quarter also had a lot to do with its disproportionate gains among altcoins.
Despite the rapidity of the price rise, the Chaikin Money Flow indicator was fairly stable at 0.32, below where it was [0.45] when ETH was trading at $285. This suggests that there was less inflow of money into the ETH market when the price was over $320, when compared to when it was trading below $300, a surprising observation that suggests potential.
If this move is just a pump and the price drops, if volume fails to hold, two parallel channels could hold future sideways movement – the first between $248 to $285, and the second between $216 to $248.