In the wild waves of cryptocurrency, Ethereum (ETH) has recently gained significant attention, strongly breaking through key resistance levels, making the entire market take notice. This breakthrough trend has not only ignited investors' enthusiasm but also triggered numerous speculations about future trends. Meanwhile, the market capitalization pattern of the crypto market is also subtly changing, with Bitcoin (BTC)'s market share data revealing some subtle signals.
First, focus on the market capitalization situation. The aggressive rally of Ethereum has made it necessary for us to closely monitor the market share indicator of BTC. The latest data shows that the BTC.D value has dropped to around 60%, a decrease of 6 percentage points compared to the previous high. Based solely on this indicator, the current market does not seem to have reached the top yet. On one hand, a 6 percentage point drop is relatively limited and far from the 10 percentage point threshold, which is typically considered an important decline indicating a market reversal; on the other hand, historical data shows that when BTC's market share falls below 40%, it often signals that the market has entered a dangerously extreme zone. Considering the current maturity of the market has improved, we might set a warning line at 50%. When the market share drops to this level, it would not be too late to begin large-scale reduction operations.
The decline in BTC's market capitalization ratio is mainly due to the strong rise of ETH. However, it is worth noting that the overall altcoin sector has not surged significantly alongside it, and the market's FOMO (fear of missing out) sentiment has not fully erupted. Utilizing market sentiment to judge the stage of the market is one of the common methods for investors. From this perspective, the current market is far from a state of greedy frenzy. Nevertheless, Ethereum's rapid rise has gradually led the market into a frenzy, and recently there has been renewed heated discussion in the community about whether ETH can surpass BTC. From the perspective of the thriving development of the smart contract ecosystem and Ethereum's own ecosystem, it is not impossible for ETH to surpass BTC. However, regarding this round of market activity, the probability of such a situation occurring is extremely low. The main driving force behind this round of market activity comes from Wall Street funds, which can essentially be understood as the spillover effect of strategic allocation funds for BTC. Understanding this, everyone is naturally clear that only when the price increase of ETH originates from a complete explosion of its own ecosystem does surpassing BTC become a realistic possibility. Therefore, in the face of some irrational statements in the market, investors must remain rational and not blindly follow the trend.
Next, let's delve into the analysis of Ethereum's market trend. Undoubtedly, from the price performance perspective, ETH has once again reached a new high, which is clearly the result of strong institutional funding. It is important to note that according to the usual market style in the crypto space, it is extremely difficult for Ethereum to break through such a strong resistance level without BTC breaking through first. In my market judgment system, Ethereum has completed an effective breakthrough. A breakthrough does not mean that there will not be a subsequent pullback; rather, even if a pullback occurs, this round of upward movement has not ended. Given the current trend, reaching 4800 points is only a matter of time. Of course, considering that this target price is still some distance away from the current price, the market needs time to further solidify the effectiveness of the breakthrough. Therefore, in the next 1-2 days, there is a high possibility of a slight pullback in Ethereum.
Today's BTC price has also seen a slight increase. Although it has not yet reached the critical level of 120,000 USD, it is undoubtedly a positive signal for the market. The ideal market development path is for Ethereum to maintain a sideways consolidation or slight pullback, further digesting the chips near the resistance level, making it more solid. Subsequently, if BTC successfully breaks through the 120,000 USD mark, then it is basically a certainty that Ethereum will reach its own historic new high as well. The future market is very promising, especially with the arrival of altcoin season. Generally speaking, the rise of altcoins relies on the spillover of funds from Ethereum. Therefore, this also provides us with an effective method for judging whether Ethereum's market has peaked. As long as there are no significant signs of a decline in ETH's buying power, its upward trend will not easily reverse. However, from a short-term trading perspective, ETH may once again test the 4000-4100 USD range, testing the support strength of that area. Therefore, investors are advised to hold onto their spot positions as much as possible and avoid excessive leverage to prevent unnecessary losses from market fluctuations.
