25/08/24 Learning from history, the second phase of crypto will see Ethereum experience significant growth, while the risks for Bitcoin increase in the second half of the year.
Powell's speech caused Bitcoin to rise by 5%, while Ethereum surged by 15%. The expectation of a rate cut from CME spiked to 91% in a short period before falling back to the current 75%. Bitcoin peaked at 117,300, and over the weekend, it tested the support near 114,700 again. On the 23rd, I reminded that if it cannot quickly break above 118,600, then the risk of a decline remains unresolved. For now, we will see if it can grind its way up.
The key focus remains on Ethereum, which peaked at 4886 before retracing and is now maintaining around 4750. Currently, my view is that the entire cryptocurrency market has entered the second phase, the phase where Ethereum leads the rise, which can also be considered the mid-to-late stage of a bull market. Here we can refer to January 2021 when Bitcoin surged to 64,800, increasing by about 1.2 times, while Ethereum rose from 950 to over 4,300, nearly 3.6 times.
Let's take a look at a few data indicators. The first is the BTC Bitcoin market capitalization ratio, which has fallen for two consecutive months, and the decline has reached 11%. Currently, many large holders are adjusting their positions in favor of Ethereum and altcoins, so this situation has also increased the risk of Bitcoin as funds flow out of it. If Ethereum can maintain a strong performance, this situation may continue for two to three months, but if it moves quickly, it could be just one to two months. At that time, Bitcoin will start its correction and pull it down.
The second indicator is that the total cryptocurrency market cap has broken its historical high and has settled into two doji candles, so from the daily chart, there is a chance to continue setting new highs.
The third indicator is the Crypto Total Market Cap Excluding BTC and ETH, which has also reached near historical highs and has formed a triangular structure here, indicating a high probability of a breakout. Among the top 100 cryptocurrencies, only 4 altcoins have outperformed ETH: OKB, PENGU, AERO, CFX. However, in recent days, we've seen short-term rebounds from BIO, Qtum, MEME, etc.
Bitcoin
The monthly chart for Bitcoin has about a week left to close. The opening for next month is crucial; if it falls below 112,000, the downside potential will open up. The weekly chart has consolidated at high levels for six weeks, with two upward spikes falling back down. Now we are just watching the support near 112,000.
The daily chart is still within the range, temporarily following the range's oscillation, but if the rising support line is broken here, we need to consider that if it cannot regain this trend line, the risk of testing the 112,000 support for the third or even fourth time is present. The daily chart is under pressure from the 20-day moving average; we need to pay attention to whether the MACD on the daily chart can form. Currently, on the 4-hour chart, it is testing the support around 114,500; next, we will focus on the strength of the rebound.
Support: 111625 to 114500
Resistance: 117500 to 118600 to 121000
Ethereum
Ethereum has formed a converging triangle breakout on the weekly level and has also reached a historical high, still looking for further acceleration. The first target is 5600, the second target is 6700. As for Tom Lee and external institutions predicting 15,000 to 20,000, we will not set our expectations too high for now.
In the eyes of veteran investors, $10,000 for Ethereum is a psychological barrier just like the $100,000 mark for Bitcoin. It's already a blessing that this cycle for Ethereum could reach such levels, so we must remain calm when others are FOMOing. In this phase, Ethereum rose from over 1,000 to over 3,000, and now we've seen the previous high again, currently at 5,700 or even 6,700.
On the daily chart, it has already broken the historical high, with a peak spike of 4887, and the recent pullback has been relatively small. So Ethereum is still steady; there is still the Fusaka upgrade at the end of the year. The only time the risk is significantly high is when Bitcoin falls below 112,000.
Support: 4400 to 4658
Resistance: 5600 to 6700
